GameStop Corp. (NYSE: GME)

Sector: Consumer Cyclical Industry: Specialty Retail CIK: 0001326380
Market Cap 10.01 Bn
P/B 1.89
P/E 23.73
P/S 2.63
ROIC (Qtr) 1.68
Div Yield % 0.00
Rev 1y % (Qtr) -4.57
Total Debt (Qtr) 4.39 Bn
Debt/Equity (Qtr) 0.83
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About

GameStop Corp., known by its ticker symbol GME, is a prominent player in the retail industry, specializing in games and entertainment products. The company maintains a significant presence in four primary geographical segments: the United States, Canada, Australia, and Europe, with a total of 4,169 stores as of February 3, 2024. GameStop's revenue is generated through the sale of new and pre-owned gaming platforms, software, and accessories, as well as collectibles and other retail products. The company's product range encompasses hardware and...

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Investment thesis

Bull case

  • Healthy cash reserves of 7.84B provide 83.17x coverage of short-term debt 94.30M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 583.50M provides strong 23.34x coverage of stock compensation 25M, indicating sustainable incentive practices.
  • Robust free cash flow of 569M exceeds capital expenditure of 14.50M by 39.24x, indicating strong organic growth funding capability.
  • Short-term investments of 986.90M provide solid 2.16x coverage of other current liabilities 457.70M, indicating strong liquidity.
  • Operating cash flow of 583.50M fully covers other non-current liabilities 18.10M by 32.24x, showing strong long-term stability.

Bear case

  • Operating cash flow of 583.50M barely covers its investment activities of (1.48B), with a coverage ratio of -0.39, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 7.84B provide limited coverage of acquisition spending of (13.90M), which is -564.22x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Long-term investments of 519.40M represent a high 1.92x of fixed assets 269.90M, indicating potential overexposure to financial assets versus operational capabilities.
  • Free cash flow of 569M represents just 0.14x of debt issuance 4.15B, suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 77.30M provide limited buffer against comprehensive income items of (72M), which is -1.07x, indicating elevated exposure to market risks.

Product and Service Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Specialty Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ULTA Ulta Beauty, Inc. 32.20 Bn 27.06 2.69 2.57 Bn
2 WSM Williams Sonoma Inc 29.62 Bn 25.19 3.40 1.47 Bn
3 TSCO Tractor Supply Co /De/ 28.42 Bn 25.23 1.93 5.72 Bn
4 DKS Dick'S Sporting Goods, Inc. 24.98 Bn 88.10 4.64 7.70 Bn
5 CASY Caseys General Stores Inc 24.65 Bn 59.49 1.65 2.92 Bn
6 BBY Best Buy Co Inc 17.85 Bn 11.66 0.41 4.09 Bn
7 MUSA Murphy USA Inc. 15.91 Bn 61.33 1.35 2.75 Bn
8 FIVE Five Below, Inc 11.68 Bn 37.94 2.64 2.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.54 2.23
EV to Cash from Ops. EV/CFO 9.83 14.70
EV to Debt EV to Debt 1.31 79.39
EV to EBIT EV/EBIT 12.99 -40.16
EV to EBITDA EV/EBITDA 29.02 11.51
EV to Free Cash Flow [EV/FCF] EV/FCF 10.08 -286.14
EV to Market Cap EV to Market Cap 0.57 6.33
EV to Revenue EV/Rev 1.51 2.39
Price to Book Value [P/B] P/B 1.89 32.78
Price to Earnings [P/E] P/E 23.73 -36.32
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -4.05
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 14.19
Dividend per Basic Share Div per Share (Qtr) 0.00 0.71
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 18.58
Interest Coverage Int. cover (Qtr) 0.00 4.43
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -190.00 13.87
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 71.11 33.75
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 569.52 -272.99
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 28,128.57 588.45
EBIT Growth (1y) % EBIT 1y % (Qtr) 500.00 29.27
EBT Growth (1y) % EBT 1y % (Qtr) 500.00 -92.23
EPS Growth (1y) % EPS 1y % (Qtr) 476.47 -121.86
FCF Growth (1y) % FCF 1y % (Qtr) 1,845.40 71.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.26 2.50
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.36 1.24
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.04
Cash Ratio Cash Ratio (Qtr) 8.41 0.74
Current Ratio Curr Ratio (Qtr) 10.39 3.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.83 25.92
Interest Cover Ratio Int Coverage (Qtr) 0.00 4.43
Times Interest Earned Times Interest Earned (Qtr) 0.00 4.43
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.10 -42.64
EBIT Margin % EBIT Margin % (Qtr) 11.60 -131.12
EBT Margin % EBT Margin % (Qtr) 11.60 -64.70
Gross Margin % Gross Margin % (Qtr) 30.80 30.93
Net Profit Margin % Net Margin % (Qtr) 11.10 -65.71