GameStop (GME) AI Stock Analysis

• Market Cap: $10.50B
• Dividend Yield: N/A
• Average Volume (3M): 12.20M
• Price to Earnings (P/E): 91.5
• Beta (1Y): 0.80
• Revenue Growth: -27.50%
• EPS Growth: 1150.23%
• Country: US
• Employees: 6,000
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Specialty Retail
• EPS (TTM): 0.27
• Shares Outstanding: 447,083,980
• 10 Day Avg. Volume: 28,304,697
• 30 Day Avg. Volume: 12,199,301
• PEG Ratio: 0.08
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.55
• Price to Cash Flow (P/CF): 112.40
• P/FCF Ratio: 138.20
• 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: -42.28% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

GameStop's overall stock score reflects its strong liquidity and cash flow recovery, offset by challenges in revenue growth and profitability. The stock is technically weak with bearish market indicators and appears overvalued, given its high P/E ratio and lack of dividend yield. These factors contribute to a moderate overall risk assessment.

Positive Factors

Business Ventures

GameStop's entry into the trading card business seems to be the only recent business venture to see modest success.

Collectibles Growth

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

Financial Performance

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

Negative Factors

Lack of Strategy

Without any clarity into its plans to turn around its fortunes, it is impossible for analysts to give management credit for achieving that result.

NFT Marketplace

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.

GameStop Business Overview & Revenue Model

Company Description

GameStop Corp. (GME) is a global retailer primarily engaged in the sale of video games, consumer electronics, and gaming merchandise. Headquartered in Grapevine, Texas, the company operates through its network of retail locations and e-commerce platform. GameStop offers a wide range of new and pre-owned gaming consoles, accessories, and video game titles, catering to both casual and hardcore gamers. In addition to its core gaming business, GameStop also sells collectibles and licensed merchandise, which include apparel and toys related to popular video game franchises.

How the Company Makes Money

GameStop generates revenue through the sale of new and pre-owned video games, gaming consoles, and accessories, both in-store and online. The company's revenue streams include the direct sale of physical and digital video game products, trade-in programs where customers can exchange used games and consoles for store credit, and the sale of collectibles and pop culture merchandise. GameStop also benefits from loyalty programs and subscription services, which provide recurring revenue opportunities. Partnerships with gaming and electronics manufacturers, as well as exclusive product offerings, are significant factors contributing to GameStop's earnings. Additionally, the company has been focusing on enhancing its digital sales channels to capture a larger share of the growing online gaming market.

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: Negative
• Last Price: 23.39
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GME, the sentiment is Negative. The current price of 23.39 is below the 20-day moving average (MA) of 23.44, below the 50-day MA of 24.70, and below the 200-day MA of 24.80, indicating a bearish trend. The MACD of -0.56 indicates Positive momentum. The RSI at 44.01 is Neutral, neither overbought nor oversold. The STOCH value of 14.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GME.

GameStop Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MHO	76 Outperform	$3.10B	5.54	20.66%	―	11.84%	21.14%
GAP	73 Outperform	$7.17B	8.70	28.81%	3.21%	1.32%	65.83%
M	69 Neutral	$3.17B	5.51	13.40%	6.48%	-3.60%	442.87%
HAS	68 Neutral	$7.44B	19.35	34.75%	3.95%	-17.28%	―
Sector *	59 Neutral	$10.97B	9.83	-1.56%	4.06%	1.31%	-16.49%
GME	54 Neutral	$10.50B	91.45	4.19%	―	-27.50%	1150.23%
PENN	44 Neutral	$2.19B	―	-10.27%	―	3.38%	38.18%

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.