GameStop Corp. (GME) stock analysis

P/E below its 5-year median

GameStop's P/E of 16.9 is below its own 5-year median of 48.6.

P/E below the industry

GameStop's P/E of 16.9 is below the Consumer discretionary median of 18.6.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B below the industry

GameStop's price-to-book of 2.10 is below the Consumer discretionary median of 4.51.

Trading below fair value

The share price of $25.62 is below our fair value estimate of $33.65.

Margin of safety over 20%

The price is 23.9% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -15.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew -7.7% over the last twelve months; the Consumer discretionary median is 2.2%.

Guidance issued

The latest outlook (fiscal year ending January 30, 2027 Adjusted EBITDA, Sep 8, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 37.9% over the last twelve months, against 30.1% a year earlier.

Return on equity under 15%

Return on equity was 15.8% over the last twelve months and averaged -19.6% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 13.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

GameStop's return on equity of 15.8% is above the Consumer discretionary median of 15.7%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 25.2% over the last twelve months, against a 5-year average of 0.7%.

Net margin above the industry

GameStop's net margin of 25.2% is above the Consumer discretionary median of 3.1%.

High debt

Debt is 67.9% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 83.1% five years ago to 67.9%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 16.9% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 8.72 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.69; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

GameStop has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.