Shares of GameStop (GME) have surged 25% in the last month, as speculative investments such as meme stocks and meme coins have ticked higher following Donald Trump’s presidential election win.
Bitcoin temporarily breached the $100k milestone, driving cryptocurrencies such as XRP (XRPUSD) and Dogecoin (DOGEUSD) to 52-week highs. Trump’s focus on ensuring a crypto-friendly environment and plans to lower tax rates seem to have lifted the risk appetite of retail traders.
Moreover, yesterday's cryptic post on X by Keith Gill, also known as Roaring Kitty, added fuel to the fire, pushing GME stock higher by 6%. Notably, Gill and GameStop were at the epicenter of the meme stock mania that gripped Wall Street in 2021.
Let’s see if there is more room to run for GameStop, given it still trades 76% below all-time highs.
Is GameStop Stock a Good Buy Right Now?
Valued at a market cap of $12.2 billion, GameStop is a specialty retailer that provides games and entertainment products in North America, Europe, and Australia. It sells new and pre-owned gaming platforms, accessories, software, and more. The company also sells collectibles, which consist of licensed merchandise related to pop culture themes across verticals such as gaming, television, and movies.
The advent of digital game downloads has weighed heavily on GameStop’s sales. Its revenue has fallen from $9.36 billion in fiscal 2016 (ended in January) to $4.55 billion in the last 12 months. In this period, its gross margins narrowed from 31.2% to 26.2%, while its operating margin declined to 0.1% from 7.1%.
In fiscal Q2 of 2025 (ended in July), GME reported net sales of $798 million in Q2, down from $1.16 billion in the year-ago period. Its operating expenses totaled $271 million, or 34% of net sales, compared to 27.7% in the prior year quarter. Notably, GameStop’s net income in fiscal Q2 stood at $14.8 million, compared to a net loss of $2.8 million last year.
What to Expect From GameStop in Fiscal Q3 of 2025
GameStop will stay in the spotlight in the days ahead, with Q3 earnings set for release after the market close next Tuesday, Dec. 10. Analysts tracking GME stock expect its sales to decline by 17.7% year over year to $887.68 million. They also expect the company to report a loss of $0.03 per share in Q3, compared to break-even earnings last year.
Moreover, GME sales are forecast to decline by 23% YoY to $4.07 billion in fiscal 2025 and by 6.4% to $3.81 billion in 2026. These falling sales estimates have raised concerns among investors about GameStop’s ability to increase the topline amid secular headwinds.
Further, investors remain cautious about Ryan Cohen’s new investment strategy. Cohen is GameStop’s CEO and is shifting focus away from core business operations. With $4.2 billion in cash and short-term investments, Cohen aims to use this capital to invest in public and private companies, which will diversify GME’s cash flows beyond its legacy retail operations. However, this strategy could yield steady returns compared to holding cash or investing in short-term fixed-income securities.
What's the Target Price for GME Stock?
GameStop remains a high-risk investment, influenced heavily by retail sentiment and other social media trends, which tends to result in volatile price fluctuations.
The single analyst tracking GME stock has a “sell” recommendation with a target price of $10, indicating a downside potential of over 65% from current levels.
