Gamestop Corporation AGME

Morningstar Rating

Stock Research and Analysis

by Mike Taggart, CFA

GameStop has been benefiting from the increasing popularity of video games. However, we believe the long-term prospects for this no-moat retailer are bleak. Pricing competition from rivals, coupled with changing dynamics in the used video game trade, Read more

Bulls Say

In January 2010, the Board of Directors approved a $300 million share repurchase program. This will effectively bolster reported earnings per share figures.

Web sites like eBay EBAY and Amazon.com AMZN cannot match the convenience of trading in games on a regular visit to GameStop's stores.

By selling products from all video game vendors, GameStop's fortunes are tied to the video game industry as a whole, rather than to any specific vendor.

By selling products from all video game vendors, GameStop's fortunes are tied to the video game industry as a whole, rather than to any specific vendor. Read more

Bears Say

Technological disruption by way of longer game life and online game delivery could deal a crippling blow to GameStop's business.

GameStop's profitability in the used games business could attract the interest of larger retailers, which could use their scale and loyal customers to establish a competitive position.

Web sites like eBay and Amazon.com enable gamers to trade games directly and could lead to a reduction in GameStop's used game revenues and profitability over time. Read more

Strategy

GameStop's strategy for growth and market share gains largely rests on increasing its store base in the U.S. and abroad. The company also aims to increase customer loyalty by engaging customers through Read more

Management

Daniel DeMatteo has served as CEO since 2008. Prior to that, he had been vice chairman and chief operating officer since 2005. He had held the COO role since 1996. R. Richard Fontaine has been executive chairman since 2008, and prior that he served Read more

Profile

GameStop is the world's largest retailer of video game products, including hardware, software, and accessories. In addition to selling new products, GameStop makes a market Read more

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