📉 📉 GameStop, how is this former game-changing meme stock doing in 2021?
Video game and electronics retailer GameStop $GME reported results for Q4 of fiscal year 2024. They showed us that the company can surprise, even if the numbers disappointed at first glance.

🔍 Key numbers:
Revenue came in at $1.28 billion, down 28.5% year-over-year and well behind expectations ($1.48 billion).

Adjusted earnings per share, however, were $0.30, nearly quadruple analysts' estimates, who were expecting only $0.08.

Operating margin remained at 6.2%, the same as in the comparable period a year ago.

Free cash flow was $158.8 million, compared to -$18.7 million in the year-ago period. A major positive turnaround.

GameStop managed to post a profit despite the absence of major new products. This is the result of strict cost discipline, an emphasis on operational efficiency and inventory optimization. The company is no longer just about physically selling video games - it is expanding its offerings to include pop culture merchandise, accessories and experimenting with digital models. Still, sales are down, not just year-over-year, but over the long term. As of 2019, sales are down an average of 10 % per year.

The big issue is the structural change in the industry, with digital distribution, subscription models and cloud gaming gradually displacing traditional disc and console sales. GameStop has to adapt, but does not yet offer a clear vision that can convince for long-term growth.

Despite weaker sales, GameStop has managed to generate positive cash flow, which is good news in an environment where many companies are still burning through capital. Free cash flow margin 12,4 % shows that the company can manage operations effectively - and if it can maintain this trend, it can buy time to transform its business model.

📉 What does that mean over time?
In the short term, the numbers were surprisingly strong. High earnings per share and a return to positive cash flow helped drive today's stock up more than 11 %. But from a long-term perspective , GameStop remains in a difficult position.

With no clear growth strategy, no new product momentum, and with long-term declining demand in the traditional segment, the risk of stagnation remains too high. While the company has a decent balance sheet and positive cash flow, it lacks the innovation to move its business forward.

GameStop is on its feet, but needs a new direction. One strong quarter is not enough to rewrite the company's story.

Are you following the company's story? Is there anyone who took advantage of the folly of the time?