Video game retailer GameStop (NYSE:GME) seems to back in favor in the markets considering the fact that over the past two weeks the stock has rallied by 30%. The company has been working on further growing its e-commerce business and experts believe that some key macro trends might favor the company in the near term.
That being said, it is quite clear that the stock still remains considerably overvalue at this point. Hence, it might be a good idea for investors to get into the stock once it corrects.
For instance, the GameStop stock now commands a price to sales ratio of 2. That is much higher than some of the better businesses in the e-retailing space like JD.com and Overstock. Companies like Macy’s and Walmart, which also have their e-commerce presence in addition to physical stores also command better multiples on that front. Considering the cooling off in interest for growth stocks, it might be possible to get the GameStop stock at a more attractive valuation in the future.