Evaluating GameStop (GME): Valuation Insights Following Net Income Rebound and Turnaround Developments

GameStop (GME) is getting attention after its latest financial report showed rising revenue and a sharp rebound in net income. This reveals progress in the company’s ongoing turnaround efforts led by CEO Ryan Cohen.

See our latest analysis for GameStop.

GameStop’s latest rebound in net income has caught some attention, but the share price hasn’t yet reflected lasting optimism, with a year-to-date price return of -30.04%. Despite buzz around leadership and new directions like collectibles, long-term holders are still in the green. Over five years, total shareholder return stands at a remarkable 646%, a testament to how quickly momentum can build even when sentiment is mixed.

If you’re watching for what else is gaining traction, now is the perfect moment to broaden your search and discover fast growing stocks with high insider ownership

With signs of a turnaround underway and recent returns still muted, investors have to ask whether GameStop is undervalued given its progress, or if the market is already pricing in the company’s next phase of growth.

Most Popular Narrative: 82.1% Undervalued

GameStop’s most followed valuation view puts fair value far above today’s close, suggesting the market may be missing a key transformation story. Here is a quote that captures what sets this perspective apart.

GameStop’s Q1 2025 financials, combined with an amazing shareholder community, just showed its takes-money-to-buy-whiskey strategy at work. This demonstrates its status as a compelling investment as the retail investors have been saying for years while fighting a corrupt legacy media, bots, social media manipulation, and hedge funds. Gamestop delivered a stellar adjusted EPS of $0.17, beating estimates by 325 percent, and achieved a $44.8 million net profit, reversing last year’s $32 million loss.

Read the complete narrative.

Is this jaw-dropping fair value built on wild earnings leaps, bold Bitcoin bets, or a future profit engine not seen in specialty retail? The narrative unlocks the specific levers driving this sky-high price target, exposing the numbers traditional models leave out. Want to see which eye-watering forecast gives this story its punch?

Result: Fair Value of $120 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

Still, execution missteps or a downturn in Bitcoin prices could undermine GameStop’s bullish thesis and delay any expected transformation.

Find out about the key risks to this GameStop narrative.

Another View: Price-to-Earnings Raises Questions

Looking at GameStop’s price-to-earnings ratio, a different story emerges. Shares are trading at 26.5 times earnings, which is noticeably higher than both the US specialty retail industry average and GameStop’s peer group, both at 18.3 times. This signals the stock could be expensive compared to its sector.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own GameStop Narrative

If you have a different take or want to see the numbers firsthand, you can craft your own story for GameStop in just a few minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding GameStop.

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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.

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