Price to Operating Profit (P/OP)
since 2006
Calculation
GameStop Corp., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Operating earnings (loss)1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Mar 26, 2024 | — | = | 15.50 | ÷ | -0.11 | -0.11 | = | -34,500 | ÷ | 305,873,200 | |
| Mar 28, 2023 | — | = | 23.15 | ÷ | -1.02 | -1.02 | = | -311,600 | ÷ | 304,675,439 | |
| Mar 17, 2022 | — | = | 21.93 | ÷ | -1.21 | -1.21 | = | -368,500 | ÷ | 305,356,992 | |
| Mar 23, 2021 | — | = | 45.44 | ÷ | -0.85 | -0.85 | = | -237,800 | ÷ | 279,743,312 | |
| Mar 27, 2020 | — | = | 1.06 | ÷ | -1.55 | -1.55 | = | -399,600 | ÷ | 257,831,968 | |
| Apr 2, 2019 | — | = | 2.53 | ÷ | -1.72 | -1.72 | = | -702,000 | ÷ | 409,069,740 | |
| Apr 2, 2018 | 9.62 | = | 3.21 | ÷ | 0.33 | 0.33 | = | 135,600 | ÷ | 406,333,276 | |
| Mar 27, 2017 | 3.78 | = | 5.21 | ÷ | 1.38 | 1.38 | = | 557,700 | ÷ | 404,843,424 | |
| Mar 28, 2016 | 4.82 | = | 7.52 | ÷ | 1.56 | 1.56 | = | 648,200 | ÷ | 415,503,088 | |
| Mar 30, 2015 | 6.57 | = | 9.42 | ÷ | 1.43 | 1.43 | = | 618,300 | ÷ | 431,074,852 | |
| Apr 2, 2014 | 8.72 | = | 10.84 | ÷ | 1.24 | 1.24 | = | 573,500 | ÷ | 461,223,708 | |
| Apr 3, 2013 | — | = | 7.56 | ÷ | -0.09 | -0.09 | = | -41,600 | ÷ | 471,345,104 | |
| Mar 27, 2012 | 5.59 | = | 5.94 | ÷ | 1.06 | 1.06 | = | 569,900 | ÷ | 535,923,784 | |
| Mar 30, 2011 | 4.81 | = | 5.66 | ÷ | 1.18 | 1.18 | = | 662,600 | ÷ | 562,801,572 | |
| Mar 30, 2010 | 5.24 | = | 5.46 | ÷ | 1.04 | 1.04 | = | 637,033 | ÷ | 611,296,400 | |
| Apr 1, 2009 | 6.87 | = | 7.05 | ÷ | 1.03 | 1.03 | = | 675,119 | ÷ | 658,047,952 | |
| Apr 2, 2008 | 17.96 | = | 13.92 | ÷ | 0.78 | 0.78 | = | 501,421 | ÷ | 646,834,832 | |
| Apr 4, 2007 | 15.09 | = | 8.25 | ÷ | 0.55 | 0.55 | = | 333,679 | ÷ | 610,309,448 | |
| Apr 3, 2006 | 17.66 | = | 5.81 | ÷ | 0.33 | 0.33 | = | 192,732 | ÷ | 585,674,360 |
Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28), 10-K (reporting date: 2016-01-30), 10-K (reporting date: 2015-01-31), 10-K (reporting date: 2014-02-01), 10-K (reporting date: 2013-02-02), 10-K (reporting date: 2012-01-28), 10-K (reporting date: 2011-01-29), 10-K (reporting date: 2010-01-30), 10-K (reporting date: 2009-01-31), 10-K (reporting date: 2008-02-02), 10-K (reporting date: 2007-02-03), 10-K (reporting date: 2006-01-28).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of GameStop Corp. Annual Report.
The financial metrics from 2006 to 2024 reveal a profound shift in the relationship between operational performance and market valuation. The analysis identifies three distinct phases: a period of growth and high valuation multiples, a period of operational peak coinciding with multiple compression, and a final period characterized by persistent operational losses and a decoupling of share price from fundamental earnings.
- Share Price Dynamics
- The share price exhibited moderate appreciation between 2006 and 2008, reaching 13.92 US$. This was followed by a decade of general decline, hitting a nadir of 1.06 US$ in 2020. A significant volatility event occurred in 2021, where the price spiked to 45.44 US$, followed by a correction and stabilization between 15.50 US$ and 23.15 US$ through 2024.
- Operating Profit per Share Trends
- Operating profitability grew steadily from 0.33 US$ in 2006 to a peak of 1.56 US$ in 2016. Despite a momentary dip into negative territory in 2013 (-0.09 US$), the company maintained positive operating margins for most of the first decade. However, from 2018 onward, a severe downward trend emerged, with operating profits remaining negative through 2024, reaching a low of -1.72 US$ in 2019.
- Price to Operating Profit (P/OP) Interpretation
- Between 2006 and 2008, the P/OP ratio was relatively high, peaking at 17.96, suggesting strong market confidence. From 2009 to 2017, a consistent trend of multiple compression is observed, with the ratio falling to 3.78 by 2017. This indicates that the market attributed less value to each unit of operating profit over time. From 2018 through 2024, the P/OP ratio became inapplicable due to the absence of positive operating profits.
- Operational and Market Decoupling
- A critical divergence is noted starting in 2021. While operating profits remained negative (-0.85 US$), the share price increased more than forty-fold from its 2020 low. This suggests that the market valuation in the final period of the analysis was driven by factors independent of the company's operating profitability.
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Comparison to Competitors
GameStop Corp., P/OP, long-term trends, comparison to competitors
| GameStop Corp. | Amazon.com Inc. | Home Depot Inc. | Lowe’s Cos. Inc. | |
|---|---|---|---|---|
| Mar 26, 2024 | — | 35.40 | 17.32 | 12.58 |
| Mar 28, 2023 | — | 48.43 | 12.16 | 11.18 |
| Mar 17, 2022 | — | 86.50 | 14.22 | 12.45 |
| Mar 23, 2021 | — | 64.48 | 17.25 | 13.52 |
| Mar 27, 2020 | — | 72.85 | 12.33 | 8.11 |
| Apr 2, 2019 | — | 68.77 | 13.51 | 21.77 |
| Apr 2, 2018 | 9.62 | 64.31 | 13.82 | 10.61 |
| Mar 27, 2017 | 3.78 | 168.60 | 13.26 | 11.97 |
| Mar 28, 2016 | 4.82 | 94.32 | 13.88 | 13.66 |
| Mar 30, 2015 | 6.57 | 123.77 | 14.03 | 14.77 |
| Apr 2, 2014 | 8.72 | 925.12 | 11.86 | — |
| Apr 3, 2013 | — | 221.06 | 13.35 | — |
| Mar 27, 2012 | 5.59 | 183.43 | 11.36 | — |
| Mar 30, 2011 | 4.81 | 94.71 | 10.38 | — |
| Mar 30, 2010 | 5.24 | 54.92 | 11.50 | — |
| Apr 1, 2009 | 6.87 | 49.38 | 9.64 | — |
| Apr 2, 2008 | 17.96 | 29.93 | 6.82 | — |
| Apr 4, 2007 | 15.09 | 47.85 | 7.50 | — |
| Apr 3, 2006 | 17.66 | 43.07 | 9.71 | — |
Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28), 10-K (reporting date: 2016-01-30), 10-K (reporting date: 2015-01-31), 10-K (reporting date: 2014-02-01), 10-K (reporting date: 2013-02-02), 10-K (reporting date: 2012-01-28), 10-K (reporting date: 2011-01-29), 10-K (reporting date: 2010-01-30), 10-K (reporting date: 2009-01-31), 10-K (reporting date: 2008-02-02), 10-K (reporting date: 2007-02-03), 10-K (reporting date: 2006-01-28).