GME

This article first appeared on GuruFocus. GameStop (NYSE:GME) is heading into its September 8 earnings report with options traders bracing for an unusually large move. The market is pricing in a 9.04% swing in either direction, well above GameStop's average 6.6% one-day post-earnings move over the past four quarters, as investors weigh sharply improving operating profit against falling sales and increasingly volatile investment gains. Warning! GuruFocus has detected 5 Warning Signs with GME. Is GME fairly valued? Test your thesis with our free DCF calculator. GameStop sells video games, consoles, collectibles and related merchandise through stores and e-commerce. But aggressive store closures and a growing investment portfolio have transformed its financial profile, making the stock increasingly sensitive to both retail execution and movements in assets held on its balance sheet. Preliminary results already remove some earnings uncertainty. GameStop expects Q2 sales of $780 million to $800 million, down from $972.2 million a year earlier, largely because of last year's Nintendo Switch 2 launch, planned store closures and the divestiture of its France operations. Profitability tells a different story. Operating income is expected at $150 million to $170 million, more than double last year's $66.4 million, while net income should reach $290 million to $310 million. But headline earnings require caution. Roughly $238 million of gains came from GameStop's eBay investment and related derivative position, partly offset by about $75 million in losses on digital assets and related receivables. GameStop owned approximately 43.4 million eBay shares worth $4.95 billion at quarter-end. The underlying operating turnaround nevertheless appears meaningful. GameStop posted $143.3 million of operating income in Q1, compared with a $10.8 million loss a year earlier, while SG&A expenses declined. The September 8 report will be less about whether GameStop beats preliminary numbers and more about what produced the operating improvement. Investors should watch gross margin, SG&A reductions, store-closure progress and management commentary on underlying retail demand. The composition of earnings also matters: continued operating-profit growth would strengthen the turnaround thesis, while heavy dependence on eBay or digital-asset gains would make profits considerably more volatile. With options pricing a larger-than-normal reaction, even modest surprises around margins, investment exposure or management's capital-allocation plans could produce an outsized stock move.

Corporate takeovers that collapse usually leave the acquirer with nothing to show for the effort. GameStop Corp. (GME) just found the exception. The retailer’s rejected $56 billion bid for eBay Inc. (EBAY) left it holding a stake that is now carrying its entire earnings story, even as its core video game business keeps shrinking. GameStop said in an Aug. 31 press release that it expects preliminary second-quarter net income between $290 million and $310 million, nearly double the $168.6 million it earned a year earlier. Net sales are projected to fall to between $780 million and $800 million from $972.2 million. The company attributed this decline to store closure, the divestiture of its France operations, and a tough comparison against last year’s Nintendo Switch 2 launch. The profit did not come from selling more games. About $238 million of the gain came from converting GameStop’s eBay derivative position into 43.4 million shares of eBay stock, now worth roughly $4.9 billion. That was partly offset by a $75 million loss on digital assets and related receivables, the company said in the same release. That eBay position is not spare change sitting on the balance sheet. It is the residue of CEO Ryan Cohen’s unsolicited offer to purchase eBay outright in May, which eBay’s board rejected as “neither credible nor attractive” according to according to Bloomberg. Cohen kept buying the stocks anyway, pushing GameStop’s stake toward 9.75% by mid-July, making it eBay’s second-largest shareholder behind Vanguard’s index funds. Related: GameStop just cleared a hurdle nobody was watching The accounting from that pursuit is now doing more for GameStop’s bottom line than its roughly 1,600 stores are doing for it. It’s an unusual outcome for a deal Wall Street mostly dismissed as a long shot. It means this quarter’s headline profit number says more about eBay’s stock price than about GameStop’s retail turnaround. GameStop revised the terms of a separate debt exchange the same morning. Noteholders will now receive about 55.5 million shares and $358.4 million in cash, funded from cash on hand, according to a regulatory filing. The original deal, announced in August, would have settled the entire $1.4 billion in stock, with share count tied to GameStop’s trading price over a 35-day window. More GameStop: The eBay deal Ryan Cohen swore he wanted is falling apart GameStop just cleared a hurdle nobody was watching Ryan Cohen passes on GameStop payday to keep pushing one acquisition Cutting that stock-only structure short means fewer new shares hit the market now. The timing lines up with a separate GameStop ambition: shareholders voted in July to authorize up to 2.5 billion new Class A shares specifically to fund a bigger stock component of a future eBay bid. Trimming today’s dilution preserves more of that pool, whether GameStop revives its takeover or settles for the joint venture Bloomberg has reported Cohen is now weighing. Collectibles and trading cards made up 41.8% of GameStop’s first-quarter revenue, up from 28.9% a year earlier, showing retail strength independent of the eBay stake. About $2.8 billion of the original convertible notes will remain outstanding once the revised exchange closes around Sept. 3, per the filing. GME shares rose roughly 4% in premarket trading Monday after the earnings news. Complete second-quarter results, which may include an update on the eBay pursuit, are due September 8. GameStop’s quarter is a preview of a pattern investors will likely see more often. Companies that build large equity stakes ahead of a takeover attempt, rather than walking away when rejected, end up carrying that position’s market swings straight into their own earnings. The stake becomes a second business investors have to value and monitor separately from the one the company actually runs. GameStop’s Sept. 8 report will show whether the retail turnaround is real on its own terms. Until then, owning this stock is only partly a bet on video games that is slowly going out of fashion. It is also a bet on how a takeover nobody expected to happen keeps finding new ways to pay off. Related: The eBay deal Ryan Cohen swore he wanted is falling apart This story was originally published by TheStreet on Aug 31, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

GameStop posted preliminary second-quarter results on Monday showing net income between $290 million and $310 million, up from $168.6 million in the same period a year ago, even as net sales fell to a range of $780 million to $800 million from $972.2 million. The retailer said net income for the quarter reflects approximately $238 million in net gains from its eBay derivative asset and equity investment, with that figure partially reduced by around $75 million in losses on digital assets and related receivables. Operating income is expected to land between $150 million and $170 million, compared with $66.4 million in the prior-year quarter. Sales declined for several reasons, the company said, including the prior-year launch of Nintendo Switch 2, planned store closures, and the divestiture of its France operations. GameStop said it expects to release complete second-quarter results on September 8. During the quarter, the company converted a previously disclosed derivative position related to eBay into a direct equity investment. As of August 1, GameStop held roughly 43.4 million shares of eBay common stock with a fair value of approximately $4.947 billion. Cash, cash equivalents and marketable securities are expected to be in the range of $5.05 billion to $5.07 billion, down from $8.69 billion at the close of the prior year's second quarter, reflecting the conversion. GameStop also announced Monday that it is amending a previously disclosed plan to exchange approximately $1.4 billion in convertible notes for Class A common stock. Under the revised terms, noteholders will receive roughly 55.5 million shares of common stock — about 73% of the consideration — and approximately $358.4 million in cash, or about 27%, which GameStop said it expects to fund from cash on hand. The exchange is now expected to close on or about September 3. GameStop stock rose 5% in premarket trading on Monday, after the amended structure limited the dilution shareholders would face from new share issuances. The original exchange agreement, announced earlier this month, was structured to be settled entirely in stock, with the number of shares determined by the average volume-weighted price of GameStop stock over a 35-day reference period. The amendment terminates the remainder of that reference period, fixing the total number of shares to be issued. GameStop has been building a stake in eBay as part of a broader takeover pursuit. In the first quarter, GameStop CEO Ryan Cohen put forward a non-binding proposal to acquire all of eBay's outstanding shares at $125 apiece, split between cash and stock. eBay's board rejected the offer, calling it "neither credible nor attractive." Following the exchange closing, approximately $1.1 billion of 2030 convertible notes and $1.7 billion of 2032 convertible notes will remain outstanding, the company said.

GameStop stock continues to trade under pressure after a prolonged slide in returns, while some of the valuation checks on earnings and asset based multiples still do not paint a clear picture of either a bargain or an obvious overpricing. Over the past 5 years, GameStop shareholders have seen the stock decline about 65%, which keeps the market focus firmly on whether the current price reflects a structurally weaker business or an overly pessimistic view. The recent plan to issue US$1.4b of senior convertible notes can ease interest costs and debt pressure. However, it also introduces the risk of future share dilution at a time when the shift from physical game sales to digital formats is challenging GameStop's traditional model. On broader valuation checks, GameStop earns a mixed score, with 4 out of 6 metrics suggesting the stock is not clearly cheap or clearly expensive relative to its fundamentals. For investors, the debate is whether GameStop's current share price already reflects the business and balance sheet pressures, or whether the valuation still leaves room for further downside if expectations reset again. Compare GameStop's mixed track record with a curated list of companies that combine quality fundamentals with potential valuation gaps using the 46 high quality undervalued stocks. The P/E ratio is a useful way to compare GameStop with other specialty retailers that also generate earnings from store based and online sales. GameStop currently trades on a P/E of about 10.7x, while the broader Specialty Retail industry average is closer to 18.7x and the peer group referenced here is around 34.0x. That is a sizeable gap in pricing for each dollar of earnings. Despite recent pressure on GameStop shares following the US$1.4b convertible notes announcement, the stock continues to trade at a discount to both its industry and peer averages on this earnings multiple. The lower P/E indicates that investors are pricing in more risk or weaker prospects than for many other retailers, even though the company is profitable on a trailing basis. On the P/E multiple alone, GameStop stock appears undervalued compared with the Specialty Retail industry and peers. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for GameStop pick up where the P/E comparison leaves off by spelling out what would need to happen to GameStop's future growth, margins and earnings for the stock to be worth materially more or materially less than today’s price. Each narrative ties a specific number to a clear view on where those drivers and key risks could head next. You can revisit these narratives on the Community page as new information becomes available. One of the top community narratives on GameStop: 92% undervalued Read one of the top narratives on GameStop Do you think there's more to the story for GameStop? Head over to our Community to see what others are saying! GameStop screens as undervalued on earnings multiples, yet broader valuation checks are only mixed. That gap reflects the market weighing a discounted P/E against questions over the durability of the business model and balance sheet priorities. For you as an investor, the key question is whether that discount compensates for the risks around the shift to digital distribution and future dilution from the convertible notes. The crux of the debate is whether GameStop can stabilise and eventually improve its earnings profile, or whether the current multiple is a warning that the stock could remain a value trap. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include GME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in eBay Inc.? Here are five stocks we like better. eBay exceeded second-quarter expectations: Organic, FX-neutral GMV rose 14% to $22.4 billion, revenue increased 14% to $3.13 billion, and non-GAAP EPS grew 17% to $1.60. Focused categories, consumer-to-consumer sales and recommerce each grew more than 20%. Growth initiatives expanded: Focused-category GMV increased 26% and surpassed 40% of total GMV, while eBay Live GMV grew roughly eightfold year over year. The $1.4 billion Depop acquisition strengthens eBay’s fashion and younger-consumer strategy but is expected to weigh on third-quarter earnings growth. Full-year guidance was raised: eBay now expects 11.5%–12.5% FX-neutral GMV growth, 11%–12% revenue growth and 10%–12% growth in both non-GAAP operating income and EPS. GameStop’s $2 Billion Buyback Sends a Confusing Signal to Investors eBay (NASDAQ:EBAY) reported second-quarter results that exceeded its guidance ranges and consensus expectations, driven by growth in focused categories, consumer-to-consumer sales, recommerce and newer initiatives including eBay Live, vehicles and shipping. Gross merchandise volume, or GMV, increased 14% year over year on an organic, foreign-exchange-neutral basis to $22.4 billion, while revenue rose 14% to $3.13 billion. Non-GAAP operating income increased 16% to $893 million, and non-GAAP earnings per share grew 17% to $1.60. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Recession Indicator: eBay's Stock Is Up More Than 50% Over the Past Year Chief Executive Officer Jamie Iannone said the company’s focused categories, C2C business and recommerce offerings—which include pre-owned and refurbished goods—each grew more than 20% during the quarter. Together, those priorities accounted for more than 70% of total GMV. Focused-category GMV rose 26% in the second quarter and surpassed 40% of eBay’s total GMV for the first time. Collectibles, motors, fashion and refurbished goods all contributed to the increase. → 3 Drone Stocks That Should Soar After the Summer Slump GameStop's eBay Gamble: Bold Move or Balance Sheet Disaster? Collectibles benefited from continued demand for trading cards, particularly basketball cards during the NBA Finals and soccer cards around the FIFA World Cup, Iannone said. The company expanded its Authenticity Guarantee for trading cards to the United Kingdom, its first expansion of that service in the category outside North America. Its AI-powered card-scanning tool has now exceeded 80 million cumulative scans. eBay Motors contributed nearly two percentage points of GMV growth, according to the company. The business includes both parts and accessories as well as vehicles, with parts and accessories representing the larger, more established portion. In the U.K., eBay launched free and easier returns for auto parts, while Canada received eBay Guaranteed Fit and automated fitment capabilities for sellers. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Vehicle GMV also continued to scale, particularly among C2C sellers and smaller dealers. The company launched native vehicle listings in its mobile app and said automation around title, VIN and odometer verification helped reduce the average time to vehicle pickup to roughly four days from more than two weeks. Fashion GMV grew, led by luxury and pre-loved inventory. eBay expanded Authenticity Guarantee coverage to more than 100 apparel, footwear and accessory brands in the U.S. and U.K. and extended jewelry eligibility to items sourced from greater China. On July 30, eBay completed its acquisition of fashion marketplace Depop for $1.4 billion in cash, including a $1.2 billion purchase price and approximately $200 million of net purchase-price adjustments. The adjustments mainly reflected investments made by Etsy and Depop before the transaction closed. Iannone said Depop broadens eBay’s fashion portfolio and gives it greater reach among younger consumers. Depop had approximately 7 million buyers when the acquisition was announced and nearly 9 million active buyers in the second quarter, according to Chief Financial Officer Peggy Alford. Management said it intends to preserve Depop’s brand, community and product experience while using eBay’s larger customer base, shipping capabilities, trust tools and marketplace infrastructure to support growth. Planned investments are centered on full-funnel marketing and shipping affordability, particularly for lower-priced fashion purchases where shipping can represent a significant share of the total cost. eBay expects Depop to become accretive to consolidated non-GAAP operating income in 2028. For the third quarter, however, Depop is expected to reduce consolidated non-GAAP operating-income growth by three to four percentage points and create a mid-single-digit headwind to non-GAAP EPS growth. eBay Live posted another record quarter, with GMV increasing roughly eightfold year over year. The company recently began self-service onboarding for eligible U.S. sellers across more than 300 categories, moving beyond its prior invite-only model. Iannone said that among established sellers who stream regularly, more than 90% increase their GMV on eBay, while median GMV growth is roughly three times that of similar sellers who do not use Live. First-time Live buyers in collectibles spend about 70% more than comparable non-Live buyers, with roughly half of the incremental spending occurring outside Live events, he said. The company also continued deploying AI tools. Its latest “magical listing” system has been fully rolled out to new and reactivated listers in the U.K., Germany and Australia. The tool uses AI and eBay’s product knowledge graph to simplify listing creation. Australia is the first market where eBay has expanded the latest version to all C2C sellers. Advertising revenue reached $596 million in the quarter, representing nearly 2.7% of GMV. First-party advertising revenue grew 24% to $570 million, while off-platform advertising increased 21%, primarily due to growth at Qoo10 in Japan. Promoted Listings now cover nearly 1.3 billion of eBay’s 2.6 billion listings, and 5.7 million sellers used at least one promoted-listing product during the quarter. For the third quarter, eBay forecast consolidated GMV of $22 billion to $22.4 billion, representing foreign-exchange-neutral growth of 10% to 12%. The outlook includes a projected 2.5-percentage-point contribution from Depop in a partial quarter. Organic GMV growth is expected to be 7% to 9%. Third-quarter revenue is expected to range from $3.07 billion to $3.12 billion, or 8% to 10% foreign-exchange-neutral growth. The company projected non-GAAP operating-income growth of 1% to 5% and non-GAAP EPS of $1.36 to $1.42. For the full year, eBay raised its outlook to consolidated FX-neutral GMV growth of 11.5% to 12.5% and revenue growth of 11% to 12%. It expects non-GAAP operating income and non-GAAP EPS each to grow 10% to 12%. The company generated $326 million in free cash flow during the second quarter and returned nearly $450 million to shareholders through $310 million of stock repurchases and $138 million in dividends. Its board declared a third-quarter cash dividend of $0.31 per share, payable in September. eBay Inc is a global e-commerce company that operates an online marketplace connecting individual consumers and businesses for the sale and purchase of new, used and collectible goods. Founded in 1995 by Pierre Omidyar and headquartered in San Jose, California, eBay grew from its early auction-style site into a diversified platform offering both auction-format listings and fixed-price "Buy It Now" transactions. The company completed an initial public offering in the late 1990s and has since evolved its platform and services to support a broad range of product categories and buyer preferences. The company's core business centers on its marketplace platform, which provides listing, search and transaction capabilities for millions of items across consumer goods, electronics, fashion, collectibles and more. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "eBay Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Ryan Cohen has spent the summer pursuing eBay Inc. (NASDAQ:EBAY). Prediction market traders doubt management will even say his company’s name tonight. eBay reports second-quarter earnings after the bell today, with the call at 5:30 p.m. ET. Polymarket gives the company a 96% chance of beating earnings, but the more interesting action is on Kalshi, where traders are betting on which words CEO Jamie Iannone and his team will say. Analysts expect adjusted earnings of about $1.50 per share on revenue of roughly $3 billion. The stock is up roughly 25% this year and has risen about 180% since Iannone took over in 2020. "Dividend" is at 97%. eBay returned $639 million to shareholders in the first quarter through $139 million of dividends and $500 million of buybacks, equivalent to about 71% of its $898 million in free cash flow. “AI” and “International” both trade in the mid-90s, standard fare for a 2026 earnings call. "Goldin" is at 90% after jumping 31 points, with "Sneaker" at 74% and "Pokemon" at 73%. The cluster matters because eBay’s enthusiast-focused categories helped drive 14% currency-neutral GMV growth last quarter even as its active-buyer base increased only modestly. Goldin, the eBay-owned collectibles auction house, recorded its highest-ever quarterly GMV, helped by the $16.5 million sale of a Pikachu Illustrator card. “Bullion” is at 65% and poses the same question. High gold and silver prices temporarily boosted first-quarter GMV, and management warned volumes should normalize in Q2. Tonight should show whether that acceleration survived as bullion volumes normalized. “OpenAI / ChatGPT” trades at just 31%, despite eBay already working with OpenAI and management discussing the partnership last quarter. Agentic shopping remains a potentially disruptive question for marketplaces whose advertising businesses depend on shoppers searching directly on their platforms. “Etsy” sits at 27%. Traders do not expect eBay to name its rival. “GameStop” trades at 26%. GameStop Corp. (NYSE:GME) owns 43.4 million eBay shares, a 9.8% stake, and the board rejected Cohen’s nonbinding $125-per-share proposal, half cash and half GameStop stock, valuing eBay near $56 billion. A separate Polymarket contract gives GameStop just a 13% chance of acquiring eBay by year-end, on roughly $2.4 million of volume. Traders don’t expect the deal to close, and they don’t expect management to say the name either. Kalshi’s numbers market is more bullish than management. Traders currently forecast roughly $22.2 billion of second-quarter GMV, comfortably above eBay’s $21.3 billion to $21.7 billion guidance and its 8% to 10% currency-neutral growth target. The active-buyer base, meanwhile, has increased by only 2 million since the end of 2022, to 136 million. Strong GMV and buyer growth would weaken Cohen’s argument that eBay spends too much for too little user growth. A slowdown or cautious guidance may hand him his best opening yet. Kalshi and Benzinga have an existing data collaboration agreement. Image: Shutterstock Read Also: JPMorgan Says Bet NVDA, AMD, but Morgan Stanley Backs MSFT, GOOGL: What Is the Best AI Trade? This article eBay Earnings Prediction Market Preview: Will Pokémon and GameStop Be a Topic? originally appeared on Benzinga.com © 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

By Juby Babu Aug 5 (Reuters) - EBay forecast third-quarter revenue above Wall Street estimates on Wednesday, leaning on its push into authenticated luxury goods, collectibles and ‌refurbished products to bring more high-value buyers to its online marketplace. The results are ‌the first since the company rebuffed GameStop's about $56 billion unsolicited bid as "neither credible nor attractive". GameStop CEO Ryan ​Cohen has, however, said he plans to continue pursuing a combination. EBay has doubled down on its "focus categories", targeting enthusiast buyers who value selection and specialist services, a strategy that sets it apart from rivals. The $1.4 billion acquisition of fashion resale platform Depop is also providing a lift, ‌expanding the company's reach among younger ⁠consumers and strengthening its position in the growing re-commerce market. "Focus categories, consumer-to-consumer and re-commerce, each grew 20% on the platform individually and collectively, ⁠representing 70% of gross merchandise volume," CEO Jamie Iannone said in an interview with Reuters. The company forecast third-quarter revenue to be between $3.07 billion and $3.12 billion, compared with analysts' estimate of $2.97 billion. The ​online retailer's ​shares, up more than 25% this year, were ​trading 1% higher after the bell. BROAD-BASED ‌GAINS Second-quarter revenue rose 15% to $3.13 billion, beating analysts' average estimate of $3.02 billion, according to data compiled by LSEG. The results reflect strength that was "broad-based" with focus categories such as collectibles, motors, fashion and refurbished all contributing to growth, Chief Financial Officer Peggy Alford said during a post-earnings call. Gross merchandise volume, a key industry metric measuring the total value of all ‌goods sold on the platform, rose 15% to $22.4 ​billion for the three months ended June 30. The Depop ​deal, which closed on July 30, ​has helped eBay unlock "new supply and new demand for the marketplace that ‌had not been there before," Iannone said. For ​the third quarter, eBay ​expects GMV growth to be between 10% and 12%, including 2.5 points of contribution from Depop, he said. Including the Depop acquisition, eBay expects annual revenue growth ​of 11% to 12% on ‌a foreign exchange-neutral basis, up from the 7% to 7.5% range it had ​projected in April, pending the deal's close. (Reporting by Juby Babu in Mexico City; ​Editing by Sriraj Kalluvila and Shilpi Majumdar)

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. GameStop stock has had a tough run over the past few years, yet current valuation checks and recent capital moves mean the story is not as simple as a stock that has just fallen out of favour. The recent decision to exchange convertible notes for equity adds another angle for investors trying to work out what the current share price really reflects. Over the last 5 years, GameStop shareholders have seen the share price decline about 51.5%, which puts the focus squarely on whether today’s valuation already reflects that weaker long term outcome. The planned exchange of about US$1.4b of convertible notes for equity can reduce balance sheet debt and interest expenses, although the extra shares may dilute existing holders and weigh on the value per share if earnings do not keep pace. GameStop scores 4 out of 6 on the valuation checks. This points to a mixed picture rather than a clear bargain or clear overvaluation on the broader tests. The issue now is whether that combination of a weaker long term share price, debt reduction plans and a mixed valuation score leaves GameStop stock at a level that adequately compensates for the risks involved. Find out why GameStop's -15.5% return over the last year is lagging behind its peers. A P/E multiple suits GameStop because earnings still matter for a retailer that investors often view through a sentiment driven lens. Right now, GameStop trades on a P/E of about 11.2x, compared with roughly 20.6x for the wider Specialty Retail industry and about 25.7x for peers. That is a sizable gap on both counts and points to the market attaching a lower earnings multiple to GameStop stock than to many competitors. The recently announced plan to swap around US$1.4b of convertible notes into equity cuts debt on paper. Even with that backdrop, the market is not pricing the shares anywhere near the peer P/E level. For you as an investor, that means the current share price implies a lower earnings valuation than is typical in the sector. It also reflects the ongoing debate about GameStop’s future business profile and dilution from more shares on issue. On the P/E multiple alone, GameStop stock currently screens as undervalued compared with both its industry and peer group. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives take the valuation puzzle around GameStop and turn it into clear, testable stories about what would need to happen to growth, margins and earnings for the stock to be worth materially more or less than today’s price, and they sit on the company’s Community page. Rather than relying on a single multiple or model output, each narrative lays out the assumptions behind its view of value so you can compare them with the actual results as GameStop’s numbers come through. One of the top community narratives on GameStop: 91% undervalued Read one of the top narratives on GameStop Do you think there's more to the story for GameStop? Head over to our Community to see what others are saying! GameStop stock currently screens as undervalued on earnings multiples, yet the broader valuation checks look mixed rather than one sided. That discount reflects real questions about how the business will use its cleaner balance sheet and whether earnings can support any future re rating. For you as an investor, the key issue is whether the lower P/E simply compensates for those risks or leaves a genuine margin of safety. The crux of the bull versus bear debate is whether GameStop can sustain a business model that justifies even a modestly higher multiple without eroding that balance sheet strength. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include GME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. GameStop stock has recovered in the short term, but with the share price still down about 52% over the past five years and the broader valuation checks sending a mixed signal, the market is still debating what the current price really implies about its future. Over the last five years, GameStop has delivered a decline of around 52%, which raises the question of whether the recent rebound is a reset toward fair value or just a pause in a longer reset. Sony's plan to end physical PlayStation discs and GameStop's response through a proposed eBay merger and push into collectibles can support a more diversified business model. However, the shift away from physical game sales may still weigh on how investors think about the stock's long term cash generation. GameStop currently scores 4 out of 6 on the valuation checks, which points to a mixed picture rather than a clear bargain or clear overvaluation. The issue now is whether GameStop's current valuation properly reflects both the risks from the move to digital gaming and the potential benefits of its efforts to reshape the business. Find out why GameStop's -2.1% return over the last year is lagging behind its peers. The P/E ratio is a useful cross check for GameStop because it ties the share price directly to the earnings the business is currently generating. GameStop trades at about 13.4x earnings, which is below both the Specialty Retail industry average of roughly 19.6x and a peer group average of about 26.2x. Despite the recent attention around Sony ending physical PlayStation discs and GameStop exploring an eBay merger, the stock still trades at a discount to these benchmarks. That gap indicates the market is applying a lower earnings multiple to GameStop than to many other retailers, while weighing the risks of the shift to digital gaming against the potential benefits of its diversification efforts. On the P/E multiple alone, GameStop stock currently appears inexpensive compared with both its industry and peer averages. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives take the valuation puzzle around GameStop and turn it into clear, testable stories about what would need to happen to future growth, margins and earnings for the stock to be worth materially more or less than it is today, and they sit on Simply Wall St's Community page. Each one ties its number to a concrete view of how GameStop's growth, profitability and risks could evolve, giving you something specific to revisit as new information comes through. One of the top community narratives on GameStop: 90% undervalued Read one of the top narratives on GameStop Do you think there's more to the story for GameStop? Head over to our Community to see what others are saying! GameStop screens as undervalued on its earnings multiple, but the broader checks point to a more mixed picture that is not a clear green light. The key question is whether the current discount is compensation for the real risk that digital distribution keeps eroding its traditional business, or a mispricing if the push into areas like collectibles and any potential partnerships gain traction. From here, what matters most is whether GameStop can turn its repositioning efforts into steady, believable cash generation that convinces the market to re-rate the stock rather than treating the low multiple as a value trap. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include GME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]