GameStop Corp. (NYSE:GME)

Market (fair) value of GameStop

The market value experienced notable fluctuations over the analyzed periods. It began at approximately 2.67 billion USD in early 2019 and decreased significantly to around 1.45 billion USD in early 2020. Following this decline, there was a substantial increase, peaking near 13.77 billion USD in early 2021. Afterwards, the market value declined again, stabilizing between roughly 5.06 billion and 7.41 billion USD from early 2022 to early 2024, showing a downward trend after the 2021 peak.

Invested capital

Invested capital showed a general decreasing trend from 2019 to 2021, dropping from approximately 3.0 billion USD to about 1.66 billion USD. There was an increase in 2022 to around 2.44 billion USD, followed by a decline in the next two years, ending near 1.86 billion USD in early 2024. Overall, invested capital declined compared to its 2019 level, with a notable temporary increase in 2022.

Market value added (MVA)

The market value added exhibited a significant change from negative values in 2019 and 2020 to a strong positive value in 2021. Specifically, MVA started at approximately -328 million USD in 2019 and decreased further to about -475 million USD in 2020. A dramatic improvement occurred in 2021, with MVA reaching over 12 billion USD. Afterward, it decreased but remained positive, with values of approximately 4.9 billion USD in 2022, 5.5 billion USD in 2023, and 3.2 billion USD in early 2024, indicating sustained value creation after 2020 but at a lower level than in 2021.

Market Value Added (MVA)

The Market Value Added exhibited significant volatility over the analyzed periods. Initially, values were negative in 2019 and 2020, indicating a market valuation below the invested capital by approximately -$328 million and -$475 million, respectively. A substantial positive reversal occurred in 2021, with MVA surging to over $12.1 billion. This peak was followed by a declining trend across 2022, 2023, and 2024, with values decreasing to approximately $4.9 billion, $5.5 billion, and $3.2 billion respectively, reflecting a reduction in market valuation relative to the 2021 peak.

Invested Capital

Invested capital decreased from approximately $3.0 billion in 2019 to about $1.9 billion in 2020, followed by a continuous decline to $1.65 billion in 2021. A rebound was noted in 2022 with an increase to roughly $2.44 billion; however, subsequent years showed a downward pattern again, falling to $1.94 billion in 2023 and further to approximately $1.86 billion in 2024. This indicates a general contraction in the invested capital base over the six-year period, with some fluctuation around 2021 and 2022.

MVA Spread Ratio (%)

The MVA spread ratio, representing the relative difference between market value added and invested capital, followed a similar pattern to MVA. It was negative in 2019 and 2020 at approximately -11% and -25% respectively, suggesting underperformance relative to capital invested. A dramatic positive spike occurred in 2021, reaching over 731%, indicating a substantial premium of market value over capital invested during that year. This ratio decreased over subsequent years to about 201% in 2022, 283% in 2023, and 173% in 2024, while maintaining strong positive values but reflecting reduced market valuation multiples compared to the 2021 apex.

Overall, the data indicates a period of initial underperformance, followed by a pronounced market valuation improvement peaking in 2021. Subsequently, both the market value added and the MVA spread ratio declined sharply but remained positive through 2024, suggesting sustained albeit moderated market optimism and value creation relative to invested capital. Invested capital showed a declining trend with some variability, which may have influenced the changes in market valuation metrics.

Market Value Added (MVA)

The Market Value Added shows significant fluctuations over the analyzed years. It was negative in 2019 and 2020, reflecting a decline in market value with respective values of approximately -328 million and -475 million US dollars. There was a notable positive reversal in 2021, with MVA reaching over 12 billion US dollars. Subsequently, MVA decreased in 2022, 2023, and 2024, falling to 4.9 billion, 5.5 billion, and 3.2 billion US dollars respectively. The overall trend indicates a recovery post-2020, followed by a gradual decline after the peak in 2021.

Adjusted Net Sales

Adjusted Net Sales show a downward trend across the period under review. Sales decreased from approximately 8.3 billion US dollars in 2019 to a low of about 5.1 billion US dollars in 2021, followed by a partial recovery to around 6.0 billion in 2022 and maintaining near 6.0 billion in 2023. A drop is observed again in 2024, with sales falling to around 5.2 billion US dollars. This pattern suggests challenges in maintaining sales levels consistently throughout the years.

MVA Margin

The MVA margin, expressed as a percentage, mirrors the volatility seen in Market Value Added. It was negative in 2019 and 2020, with values of approximately -4% and -7.35%, respectively. In 2021, there was a sharp increase to 237.84%, showing a strong positive market value addition relative to sales. Subsequently, the margin decreased but stayed positive in 2022 (81.19%), 2023 (91.31%), and 2024 (61.76%). Despite a decline from the peak, the margin remains substantially higher than the negative values experienced before 2021, indicating enhanced value creation relative to sales since then.