Pros and Cons of Investing in Gamestop Stock

GameStop Corp. The U.S. stock has corrected substantially from its highs, but it is still trading significantly higher than its levels prior to the induced rally by retail investors.

Its cash-rich balance sheet and new initiatives are potential positives for stockhe stock.

But there is a lot of uncertainty about the turnaround and a rising interest rate environment is leading to a correction in all risk assets.

GameStop Corp. Revenue for FY2017 was ~$8.5 billion, which fell to ~$5 billion for FY2020. FY2021 witnessed growth in GME revenues,

Due to increased competition from e-commerce, GME's gross margin declined from 31.4% in FY16 to 22.4% in FY2021, while SG&A as a % of revenue increased to 28.4% from 23.4% in the same period.

All of this signals a great deal of uncertainty for the future of GME.