GameStop Earnings Preview (NYSE: GME)

GameStop Corp. (NYSE: GME), the brick-and-mortar video game retailer turned meme stock phenomenon, continues to experience significant volatility and strategic shifts that have defined the company's recent performance.

All eyes are now on the upcoming earnings release scheduled for after market close today. The estimated EPS for the current quarter is $0.16, a significant increase from the $0.01 reported in the same quarter last year. Analysts also project modest growth, with revenue estimates of $823.25 million representing a 3.12% year-over-year increase, reflecting cautious optimism about the video game retailer's transformation efforts amid ongoing competitive challenges.

GameStop's recent financial performance has been a mixed bag. The first quarter of 2025 saw the company beat EPS estimates, reporting $0.17 against an expected $0.08. However, revenue fell short, coming in at $732.4 million compared to the anticipated $750 million. The collectibles segment provided a bright spot, showing a 54% increase in revenue, suggesting a potential avenue for growth beyond traditional gaming retail.

Earlier in the year, the fourth quarter of 2024 saw a similar pattern: EPS exceeded expectations at $0.30 versus $0.08, while revenue lagged behind at $1.28 billion compared to the projected $1.48 billion.

Perhaps more significantly, GameStop's board approved an update to its investment policy to include Bitcoin as a treasury reserve asset. While this move initially boosted the stock price, its long-term impact remains to be seen, considering the inherent volatility of cryptocurrency markets.

Analyst opinions on GameStop remain sharply divided. Wedbush, for instance, maintains an “Underperform” rating with a $10.00 price target, despite raising its Q4 2026 earnings estimates. This suggests a fundamental skepticism about the company's long-term prospects. Other analysts likely have similar reservations, citing the challenges of adapting to the digital age and the intense competition in the gaming market.

While the prevailing narrative focuses on GameStop's challenges and the risks of meme stocks, the company has a loyal, albeit volatile, shareholder base that is deeply invested in its success. The company has also made strides in diversifying its revenue streams, particularly with the growth of its collectibles segment.

The move into Bitcoin, while risky, demonstrates a willingness to innovate and explore new opportunities.

The company's future hinges on its ability to successfully navigate the changing landscape of the gaming industry and execute its strategic initiatives. The meme stock saga continues, and the next chapter could be written with today's earnings release.