GameStop (GME) AI Stock Analysis

• Market Cap: $13.80B
• Dividend Yield: N/A
• Average Volume (3M): 7.96M
• Price to Earnings (P/E): 116.2
• Beta (1Y): 0.84
• Revenue Growth: -27.50%
• EPS Growth: 1150.23%
• Country: US
• Employees: 6,000
• Sector: Consumer Cyclical
• Sector Strength: 72
• Industry: Specialty Retail
• EPS (TTM): 0.27
• Shares Outstanding: 447,300,500
• 10 Day Avg. Volume: 8,027,917
• 30 Day Avg. Volume: 7,961,804
• PEG Ratio: 1.67
• Price to Book (P/B): 1.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 74.96
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $13.50
• Price Target Upside: -56.25% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 64 Neutral
• Price Target: $33.00 ▲( 6.93% Upside)

GameStop's overall stock score reflects strong technical momentum and a robust balance sheet, but is tempered by high valuation concerns and profitability challenges. The stock's upward trend is appealing, yet the high P/E ratio and lack of dividend highlight potential risks. While cash flow recovery is a positive sign, strategic pivots are necessary to address revenue declines.

Positive Factors

Collectibles Growth

The 'collectibles' category grew by 15% in Q4, despite an overall sales decline of 28% year-over-year.

Operating Profit

GameStop impressed with a rare operating profit for its holiday quarter, despite sharply lower revenue.

Negative Factors

NFT Marketplace Struggles

GameStop's NFT marketplace strategy has struggled to gain traction.

Revenue Decline

Revenue continues to fall dramatically year-over-year as GameStop closes stores and more games are sold digitally.

Stock Valuation Concerns

Despite a complete lack of articulated strategy, GameStop has consistently been able to capitalize on the existence of 'greater fool' willing to pay more than twice its asset value for its shares.

GameStop Business Overview & Revenue Model

Company Description

GameStop Corp., a specialty retailer, provides games and entertainment products through its e-commerce properties and various stores in the United States, Canada, Australia, and Europe. The company sells new and pre-owned gaming platforms; accessories, such as controllers, gaming headsets, virtual reality products, and memory cards; new and pre-owned gaming software; and in-game digital currency, digital downloadable content, and full-game downloads. It also sells collectibles comprising licensed merchandise primarily related to the gaming, television, and movie industries, as well as pop culture themes. As of January 29, 2022, the company operated 4,573 stores and ecommerce sites under the GameStop, EB Games, and Micromania brands; and 50 pop culture themed stores that sell collectibles, apparel, gadgets, electronics, toys, and other retail products under the Zing Pop Culture brand, as well as offers Game Informer, a print and digital video game publication featuring reviews of new releases, previews of the big titles on the horizon, and coverage of the latest developments in the gaming industry. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1996 and is headquartered in Grapevine, Texas.

How the Company Makes Money

GameStop generates revenue primarily through the sale of new and pre-owned video game hardware, software, and accessories. Its key revenue streams include brick-and-mortar retail sales, e-commerce sales on its website, and the trade-in and resale of pre-owned video games and consoles. The company also earns money through the sale of collectibles and other consumer electronics, such as virtual reality headsets and headphones. GameStop leverages exclusive partnerships with gaming companies and console manufacturers to provide customers with early access to new releases and exclusive bundles, enhancing its revenue potential. Additionally, GameStop's loyalty program and gift card offerings contribute to its earnings by encouraging repeat purchases and customer engagement.

GameStop Financial Statement Overview

Summary

GameStop's financial performance reveals challenges in revenue and profit growth, despite improved gross margins and a robust balance sheet with strong liquidity. The cash flow indicates a positive turnaround, with improved operating cash generation.

Income Statement

GameStop's income statement reveals a challenging environment with a declining revenue trend and negative EBIT and EBITDA margins in recent years. The gross profit margin improved slightly to 29.1% in 2025, up from 23.5% in 2020, indicating some improvement in cost management. However, the net profit margin remains volatile, showing a slight positive of 3.4% in 2025 after losses in previous years. The revenue growth rate is negative, reflecting a contraction in sales, particularly notable after the 2023 period.

Balance Sheet

GameStop's balance sheet demonstrates strong liquidity with substantial cash reserves, evidenced by cash and equivalents of $4.77 billion against total debt of $410.7 million in 2025. The debt-to-equity ratio is low, indicating minimal leverage. However, the return on equity (ROE) remains low due to fluctuating net income. The equity ratio stands strong at 83.9%, showcasing a solid capital structure with significant shareholder equity.

Cash Flow

The cash flow analysis shows improvement in operating cash flow, turning positive at $145.7 million in 2025, a significant turnaround from negative figures in previous years. Free cash flow also shows positive growth, indicating improved cash generation. However, the operating cash flow to net income ratio is moderate, suggesting ongoing challenges in translating accounting profits into cash. The free cash flow to net income ratio aligns similarly, highlighting the company's recovery in cash liquidity.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
3.82B	5.27B	5.93B	6.01B	5.09B
	Gross Profit
1.11B	1.24B	1.37B	1.35B	1.26B
	EBIT
-16.50M	-34.50M	-308.90M	-361.80M	-254.70M
	EBITDA
22.40M	24.50M	-240.40M	-291.30M	-214.60M
	Net Income Common Stockholders
131.30M	6.70M	-313.10M	-381.30M	-214.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.77B	1.20B	1.39B	1.27B	508.50M
	Total Assets
5.88B	2.71B	3.11B	3.50B	2.47B
	Total Debt
410.70M	602.80M	616.60M	649.00M	1.05B
	Net Debt
-4.35B	-318.90M	-522.40M	-622.40M	538.30M
	Total Liabilities
945.60M	1.37B	1.79B	1.90B	2.04B
	Stockholders Equity
4.93B	1.34B	1.32B	1.60B	436.70M
Cash Flow		Free Cash Flow
129.60M	-238.60M	52.30M	-496.30M	63.70M
	Operating Cash Flow
145.70M	-203.70M	108.20M	-434.30M	123.70M
	Investing Cash Flow
265.10M	-33.20M	-222.70M	-64.80M	36.90M
	Financing Cash Flow
3.44B	-11.60M	-7.90M	1.20B	-55.40M

GameStop Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GME, the sentiment is Positive. The current price of 30.86 is above the 20-day moving average (MA) of 27.78, above the 50-day MA of 25.90, and above the 200-day MA of 25.26, indicating a bullish trend. The MACD of 0.85 indicates Negative momentum. The RSI at 69.02 is Neutral, neither overbought nor oversold. The STOCH value of 72.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GME.

GameStop Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MHO	77 Outperform	$2.94B	5.63	19.02%	―	8.68%	8.39%
GAP	73 Outperform	$10.44B	12.61	28.81%	2.23%	1.32%	65.83%
HAS	70 Outperform	$9.58B	22.55	39.16%	3.17%	-10.31%	―
M	70 Neutral	$3.37B	5.85	13.40%	6.05%	-3.60%	442.87%
GME	64 Neutral	$13.80B	116.19	4.19%	―	-27.50%	1150.23%
Sector *	62 Neutral	$6.88B	11.26	2.78%	3.93%	2.65%	-22.00%
PENN	48 Neutral	$2.21B	―	-2.81%	―	5.51%	92.46%

GameStop Corporate Events

GameStop Reports Q3 Sales Decline, Net Income Surge

In its third-quarter results for 2024, GameStop reported a decline in net sales to $860 million from $1.078 billion in the same quarter of the previous year. Despite the drop in sales, the company saw a net income of $17.4 million, compared to a net loss of $3.1 million in the prior year, and completed an equity offering, raising approximately $400 million, which bolstered its cash reserves to $4.616 billion.