GameStop Corp. (GME)

STA5248 (65.28) Submitted: 12/21/07 11:07 AM : Start Price: $58.74 GME Score: -19.03

Gamestop has been a monster investment for people have held it for a while, and it will continue to grow over the next couple years. The financials looks prestine, with growing revenues, profits, operating profits and solid management has put this company in the eyes of many investors. While consoles sales are up because of the 360, ps3 and Wii and their ever decreasing price and stronger sales, their real hefty profit margins come from the softwares and used games. With more consoles on the market, and the Wii increasing the gaming market there is sure to be more software sales in the coming quarters. Their biggest competitors are Walmart, Target, Bestbuy...however as a niche videogame retailer they are the undisputed leader. However, they are facing a couple problems. You are starting to see decreasing sales in many stores as well as less expansion because of the saturated US market. Add that in with the rise of the digital distribution and Gamestop might see problems in the future unless it comes up with new revenue streams or ingenious distribution methods. Gamestop has recently started offering downloadable PC games. They also should start thinking about more aggressively expanding into the emerging markets such as India, Mexico, and Brazil. For now though, GME is a buy.

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