Why GameStop Is Poised to Plunge

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, video game retailer has received an alarming one-star ranking.

With that in mind, let's take a closer look at GameStop and see what CAPS investors are saying about the stock right now.

GameStop facts

 

 

Headquarters (founded)

Grapevine, Texas (1994)

Market Cap

$4.6 billion

Industry

Computer and electronics retail

Trailing-12-Month Revenue

$8.9 billion

Management

CEO J. Paul Raines (since 2010)

CFO Robert Lloyd (since 2010)

Return on Equity (average, past 3 years)

5.3%

Cash/Debt

$635.8 million / $0

Dividend Yield

2.8%

Competitors

Amazon.com 

Best Buy 

Wal-Mart Stores 


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 11% of the 3,174 members who have rated GameStop believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, Yakoloi, succinctly summed up the GameStop bear case for our community:

No matter how well run, or how solid this company is there is one thing that will KILL [GameStop]. Direct digital game sales. ... Remember what happened to Blockbuster video? When is the last time you saw Wherehouse CD store? The same thing that happened to music and movies is happening to the Video Games. Gamestop has its foot in the door of the direct digital download service but it is far too little far too late with Microsoft, Sony and other major publishers far ahead in the game. Their entire business model is backed into a shrinking corner, abandon ship!

To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

The article Why GameStop Is Poised to Plunge originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com. It also owns shares of GameStop and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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