GameStop (GME) Q1 Preview: Rising Stock Faces Questions on Revenue and Strategy

GameStop Corp. (GME) is approaching its Q1 2025 earnings release with the wind at its back. Shares are trading near $29.95, riding a wave of positive technical signals. The TipRanks AI Analyst assigns a Neutral score of 65, with a price target of $34.00 that suggests a potential upside of 13.52 percent. With sentiment improving but fundamentals still in question, the upcoming report could help define the next chapter for the stock.

Crypto, Trading Cards, and NFT

The market will be watching to see if the company can build on the operating profit it posted last quarter, despite a sharp drop in revenue. Analysts and investors are also assessing the company’s evolving strategy, which now includes cryptocurrency holdings and a focus on collectibles.

GameStop announced in late May that it purchased 4,710 Bitcoins. This move aims to diversify its asset base and enhance its financial position. While this adds liquidity to the balance sheet, it also introduces volatility and regulatory risk. The TipRanks AI Analyst views this as a neutral factor for now, as the risks attached to this initiative are still relatively unknown.

The company’s trading card business has seen modest success, helping offset weakness in its core video game hardware and software sales. However, revenue in both those categories continues to decline. GameStop delivered Q4 revenue that fell short of expectations and continues to close physical stores in several markets. Its NFT marketplace has also struggled to gain traction, highlighting that the strategy has not yielded meaningful growth, and consumer interest in NFTs has waned.

GME’s Financials

Financially, GameStop appears stable. It holds $4.77 billion in cash and short-term investments and carries $410.7 million in debt. Its equity ratio stands at a solid 83.9%. Operating cash flow turned positive in 2025 at $145.7 million, and free cash flow improved to $129.6 million.

Gross profit margins have risen slightly, up to 29.1% from 23.5% in 2020. Net income turned positive at $131.3 million, compared to a loss of over $300 million just two years earlier. However, revenue growth remains negative at -27.5% year-over-year.

On the technical side, GME has a positive momentum rating. The stock trades above its 50-day and 200-day moving averages. TipRanks data shows that GME trades at a high price-to-earnings ratio of 113.3. This suggests valuation concerns, particularly in comparison to its peer group in the specialty retail sector.

_{Revenue by segment over time shows ongoing declines in hardware and software, while collectibles remain the only area with steady growth. Source: Main Street Data}

Is GameStop a Good Stock to Buy?

The most recent analyst rating for GME stock is a Sell with a $13.50 price target and a 54.92% downside. This reflects concern about the long-term business model and valuation risks. Spark, on the other hand, rates GameStop as a Hold with a 34$ price target for GME stock, implying a 13.52% upside.

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