Here’s how much you’d have if you invested $1000 in GameStop 10 years ago

It is crucial for investors to know how the stock’s prices change over time. This can have a significant impact on your investment portfolio and help you compare investment returns across industries and sectors.

FOMO (fear of missing out) is another factor that investors can be affected by, particularly with tech giants or popular consumer-facing stocks.

What if GameStop (GME), had been purchased ten years ago? Although it may have been difficult to keep GME around for that long, what would your investment today be worth?

GameStop’s Business in-Depth

Let’s look at GameStop’s major business drivers with that in mind.

GameStop Corp. is headquartered in Grapevine, Texas. It is the largest retailer of video games worldwide. GameStop Corp. offers the largest selection of pre-owned and new video gaming consoles, accessories, and video games in both digital and physical formats. The company offers a unique buy-sell trade program that allows customers to trade in games consoles, accessories, and other electronics for cash, credit, or in-store cash. The company offers a variety of digital products through all its channels. These include downloadable content and prepaid digital. Prepaid subscription cards can also be used to purchase digital software.

The company also publishes Game Informer, the world’s largest print and digital video game publication featuring reviews of new title releases, game tips and news regarding current developments in the video game industry. PowerUp Rewards program is also available. It operates in four geographic regions: Australia, Canada and the United States.

The company’s games and entertainment products were available in 4,573 shops worldwide as of Jan 29, 2022. The company’s products are categorized as follows:

Hardware and Accessories (52% of FY21 Sales). GameStop sells pre-owned and new console and PC games platforms. The current generation consoles are the Sony PlayStation 4 (2013) Microsoft Xbox One (2013), and the Nintendo Switch (2018). Accessories are primarily controllers and virtual reality products.

Software (33.5% of Sales). The company offers pre-owned and new video game software, for both current and certain previous generation consoles. It also sells digital downloadable content and in-game digital currency.

Collectibles (13.7% of Sales): The category consists of licensed merchandise, primarily related to the video game, television and movie industries and pop-culture themes, which are sold through the company’s video game store and e-commerce properties, and ThinkGeek and Zing Pop Culture stores.

On Jul 6, 2022, GameStop’s board of directors approved and declared a four-for-one split of the company’s Class A common stock in the form of a stock dividend.

Bottom Line

It takes patience, research, and a bit of risk to put together a portfolio that is successful. GameStop says that if you purchased shares 10 years ago, you are likely to feel great about your investment today.

Our calculations show that a $1000 investment in January 2013 would have a value of $3,712.22, which is a 271.22% increase, as of January 18, 2020. This return does not include dividends and includes price appreciation.

The S&P 500 rose 169.49% and the price of gold increased 8.72% over the same time frame in comparison.

Analysts expect more upside for GME.

GameStop’s shares have performed below the industry for the past three month. While the company’s third-quarter fiscal 2022 loss was larger than expected, the difference was less than that of the year-ago quarter. Softness in hardware and accessories as well as software categories led to a decline in the top line year-over-year that missed the Zacks Consensus estimate. However, GameStop’s focus on optimizing costs helped post a 8.3% decline in SG&A expenses on a year-over-year basis. The company has taken initiatives to diversify its business and transform itself into a technology-driven company. The company has been looking for growth opportunities in cryptocurrency and non-fungible tokens, as well as Web 3.0 gaming verticals. Management sees a long-term opportunity for the collectibles sector, with sales increasing 7.9% in the last quarter.

Stock has gained 7.60% in the past four weeks. In the last two months, there has been no lower earnings estimate than 2 for fiscal 2023, and the consensus estimate has increased.

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