Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, March 30, 2007

Article Excerpt

GAMESTOP CORP. $32.57, New York symbol GME, earned $0.81 a share in its fourth fiscal quarter ended February 3, 2007, up 47.3% from $0.55 a year earlier. (All per share amounts reflect the recent conversion of the class A and B shares into a single class of common, and a 2-for-1 split.) Sales grew 35.3%, to $2.3 billion from $1.7 billion. Same-store sales soared 26.5%, as new video game systems from Sony and Nintendo attracted shoppers during the busy Christmas shopping season. The latest earnings exceeded earlier forecasts of $0.80 a share on sales of $2.1 billion, and the stock jumped 11%. In addition, GameStop now predicts same-store sales in the next quarter will rise 12% to 14%, as Sony starts selling its PlayStation 3 machine in Europe. Demand for new game machines and software should continue to spur GameStop’s sales. But the company is vulnerable to growing competition from discount retail chains, particularly with its stock at 25 times earnings. GameStop…