The Bull Case For GameStop (GME) Could Change Following Major Profit Reversal and Strong Q2 Earnings

Simply Wall St
  • GameStop reported its second quarter and six-month earnings for periods ended August 2, 2025, disclosing second-quarter sales of US$972.2 million and net income of US$168.6 million, both up considerably compared to the same period last year.
  • For the six months, the company reversed a net loss from the prior year to net income of US$213.4 million, indicating a sharp shift in profitability.
  • We'll explore how GameStop's significant improvement in earnings and profitability informs its current investment narrative.

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What Is GameStop's Investment Narrative?

To believe in GameStop right now, an investor needs to have conviction in the company’s ability to sustain or build upon its profit turnaround, even if the longer-term outlook for revenue remains muted. The latest earnings report presents a sharp swing toward profitability, with net income and earnings per share jumping significantly compared to last year. These results may prompt a reassessment of short term catalysts, as improving margins could shift focus from cost control to new growth avenues or operational stability. However, risks remain prominent: analysts were already forecasting revenue and earnings declines over the next several years, and those projections could temper enthusiasm despite recent results. While the lack of recent buybacks and management turnover haven’t materially shifted the investment story, increased profit quality this quarter may nudge the narrative's balance, at least for now. Yet, not all risks are off the table despite the strong earnings report, profit sustainability still deserves attention.

GameStop's shares have been on the rise but are still potentially undervalued by 24%. Find out what it's worth.

Exploring Other Perspectives

GME Community Fair Values as at Sep 2025
Twenty-four fair value estimates from the Simply Wall St Community span US$7.34 to over US$420, showing profound opinion differences. Despite the broad community split, muted revenue projections remain an important piece of the performance puzzle. Explore these viewpoints for a fuller market picture.

Explore 24 other fair value estimates on GameStop - why the stock might be a potential multi-bagger!

Build Your Own GameStop Narrative

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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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