A Look At GameStop (GME) Valuation After Recent Volatility And Profitability Update
Why GameStop Is Back on Investors’ Radar
GameStop (GME) has drawn fresh attention after recent share price swings, with the stock showing a mix of shorter term declines and gains over the month and past 3 months. Investors are reassessing what the current valuation implies.
See our latest analysis for GameStop.
At a share price of $23.26, GameStop’s recent swings include a 10.24% 30 day share price return and 13.91% 90 day share price return. The 1 year total shareholder return of a 12.74% decline contrasts with a 109.32% gain over five years, indicating that recent momentum has differed from the mixed results experienced by longer term holders.
If GameStop’s volatility has you looking wider, this could be a good moment to scan the market for 23 top founder-led companies and see what else fits your style.
With GameStop trading at $23.26 and an estimated intrinsic discount of about 79%, the key question is whether this gap signals mispricing or if the recent returns mean the market is already pricing in future growth.
Most Popular Narrative: 89.4% Undervalued
According to the most followed narrative on GameStop, a fair value of $220 sits far above the last close at $23.26, and that wide gap is central to the story supporters are focusing on.
GameStop’s Q1 2025 financials, combined with an amazing shareholder community, just showed its takes-money-to-buy-whiskey strategy at work, demonstrating 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%, and achieved a $44.8 million net profit, reversing last year’s $32 million loss.
Curious how a retailer with a large cash pile, Bitcoin exposure and a high future profit multiple can support such a jump in fair value? The narrative leans heavily on margin improvements, profit growth and a premium earnings multiple that is usually associated with fast growing names. Want to see which assumptions do the heavy lifting in that $220 figure and how they connect to revenue, profits and long term expansion? Read the full story behind the numbers.
Result: Fair Value of $220 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this hinges on continued profitability and effective use of the cash and Bitcoin holdings. Any setback in either area could quickly challenge the $220 fair value story.
Find out about the key risks to this GameStop narrative.
Another View: Earnings Multiple Paints a Tougher Picture
That $220 fair value hinges on strong cash flows, but the market is also looking at earnings. On a P/E of 24.7x versus 21.5x for the US Specialty Retail industry and 19x for peers, GameStop trades at a clear premium that raises the bar for execution.
This premium can be a sign of confidence or a source of valuation risk if expectations reset. Which matters more to you right now: the discount to fair value, or paying above peer and industry earnings multiples?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
If this mix of optimism and caution feels familiar, it is worth moving quickly to review the numbers yourself and decide where you stand, starting with 2 key rewards.
Looking for more investment ideas?
If GameStop has sharpened your thinking, do not stop here. This is the moment to widen your watchlist and compare it with other focused opportunities across the market.
- Target potential mispricings by scanning a curated list of 56 high quality undervalued stocks that pair fundamentals with a market price that some investors may have overlooked.
- Strengthen your focus on resilience by checking out 80 resilient stocks with low risk scores, built around companies with lower risk scores that may suit a steadier approach.
- Hunt for future standouts early by reviewing a screener containing 24 high quality undiscovered gems where quality metrics are already in place but attention is still limited.
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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