Shares of GameStop (GME) are up more than 9% in pre-market trading today after the company reported stronger-than-expected second-quarter results on September 9. The video game retailer delivered a healthy earnings beat, with Q2FY25 sales climbing 22% year-over-year to $972.2 million. Adjusted earnings per share came in at $0.25, a sharp improvement from just $0.01 in the same quarter last year.
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This marks the fifth straight quarter in which GameStop has both posted a profit and exceeded Wall Street expectations, signaling that its turnaround efforts are gaining traction.
GameStop’s Hardware and Collectibles Drive Growth
GameStop attributed its solid quarterly performance to Hardware and accessories sales, which rose 31% year-over-year to $592.1 million. A majority of this growth was driven by the release of the Nintendo (NTDOY) Switch 2 video game console during the quarter.
Additionally, the company’s strategic shift towards digital storefronts and exclusive collectibles has garnered strong customer interest. In Q2, revenue from Collectibles surged 63% year-over-year to $227.6 million. On the other hand, Software revenue took a hit, declining 27% to $152.5 million compared to the same period last year.
Meanwhile, GameStop also reported that its Bitcoin holdings at the end of Fiscal Q2 were valued at $528.6 million, as part of its cryptocurrency treasury strategy.
Investors seem impressed by GameStop’s financial performance as it delivers steady profits and expands in collectibles and digital sales. However, declining software sales and the risks from cryptocurrency holdings remain key concerns.
Is GME Stock a Buy, Hold, or Sell?
On TipRanks, only one analyst has rated GameStop stock in the past three months, based on which GME stock has a Moderate Buy consensus rating. However, more analysts could review the company following its Q2 results.
Nonetheless, TipRanks’ Technical Analysis Tool shows a Buy consensus based on 11 Bullish, four Neutral, and seven Bearish indicators.
