GME Stock Earnings Preview: Will GameStop Q1 2025 Results Fuel Rally or Reverse Gains?

GameStop Corp. (NYSE: GME) has seen its stock surge over 50% in the past year despite facing significant revenue challenges. With the company set to report Q1 earnings before market open on June 6, 2025, investors are watching closely for signs of a turnaround in the specialty retailer's core business.

Earnings Expectations: Continued Revenue Contraction

Wall Street analysts forecast GameStop to report revenue of $796.81 million, representing a significant 9.64% year-over-year decline. Earnings per share are expected to come in at -$0.04, deteriorating 66.67% from the same period last year.

This potential revenue decline continues a concerning trend for the company, which has struggled to maintain sales momentum in an increasingly digital gaming landscape.

Business Segment Performance

GameStop's business is divided into three main segments, each showing mixed performance in recent quarters:

• Collectibles: $171.1 million in Q4 2024 (+22.74% YoY) - The strongest performing segment
• Hardware & Accessories: $417.4 million in Q4 2024 (-7.49% YoY) - Continuing to show weakness
• Software: $271.8 million in Q4 2024 (+30.86% YoY) - Showing recovery after previous declines

Follow up on more detailed business metrics here

Recent Stock Performance

Despite the revenue challenges, GME stock has shown remarkable resilience:

• Current Share Price: $27.54
• 1-Week Return: +0.22%
• 1-Month Return: +8.43%
• 3-Month Return: +11.36%
• 6-Month Return: +10.69%
• 1-Year Return: +52.92%

Access concise statistics and key financial ratios for GameStop – view them here.

Technical & Momentum Indicators

Current technical indicators for GameStop present a mixed picture:

• RSI (14): 53.5 - Neutral territory, neither overbought nor oversold
• MFI: 48.77 - Near neutral, showing balanced money flow
• StochRSI: 12.12 - Approaching oversold conditions
• CCI: -23.98 - Slightly bearish momentum

The stock is currently trading above its key moving averages, with price ($27.54) above the 20-day SMA ($26.87), 50-day SMA ($24.96), and 200-day SMA ($24.98), suggesting a bullish technical setup despite the mixed indicators.

Options Activity

Options data ahead of earnings reveals noteworthy institutional positioning:

• Total Premium: $15,122,482
• IV Rank: 18.69 - Relatively low, suggesting options are pricing in less volatility than historical norms
• Call Volume: 168,706 vs Put Volume: 25,119
• Put-Call Ratio: 0.15 - Extraordinarily bullish positioning
• Open Interest: 1,187,344 with a change of +30,616
• IV30: 77%

The extremely low put-call ratio indicates overwhelming bullish sentiment in the options market, despite analyst concerns about fundamentals.

Access real-time options chains and key derivatives data for GameStop – explore them here.

Short Interest

GameStop remains a heavily shorted stock, continuing its status as a potential short squeeze candidate:

• Short Float: 13.4%
• Shares Short: 50,002,641
• Short % of Outstanding: 11.18%
• Fail-to-Deliver Shares: 17,010
• Relative FTD (%): 0.17%

The significant short interest could contribute to price volatility following the earnings announcement.

Access up-to-date short interest figures for GameStop via Short Interest Data.

Analyst Ratings & Price Targets

Wall Street remains skeptical about GameStop's prospects:

• Analyst Ratings: 1 analyst covering the stock
• Consensus Rating: Sell
• Average Price Target: $10.00
• Implied Downside: -63.7% from current levels

The stark disconnect between analyst price targets and current trading levels highlights the unique market dynamics surrounding GME stock.

Access consensus analyst forecasts for GameStop via Analyst Forecasts.

Valuation & Fundamentals

By traditional metrics, GameStop's valuation appears stretched:

• P/E Ratio: 83.44 (Trailing) / 58.2 (Forward)
• PEG Ratio: 0.06
• P/S Ratio: 2.77 (Trailing) / 4.9 (Forward)
• P/B Ratio: 2.15
• Gross Margin: 29.14%
• Net Margin: 3.43%

The high P/E ratio coupled with declining revenues raises questions about sustainable valuation, though GameStop's unique market position and retail investor base have consistently defied traditional valuation metrics.

Access comprehensive fundamental data for GameStop via Financials.

Cash Flow & Balance Sheet

GameStop maintains an exceptionally strong liquidity position:

• Operating Cash Flow: $145.7 million
• Free Cash Flow: $129.6 million
• Cash & Equivalents: $4.76 billion
• Current Ratio: 8.05
• Debt-to-Equity: 0.08

With $12.12 cash per share and minimal debt obligations, GameStop has significant financial flexibility to fund potential strategic pivots, despite operational challenges in its core business.

Risks & Considerations

• Stock-Based Compensation Impact: At 0.43% of revenue, stock-based compensation remains modest compared to many tech companies
• Valuation Sensitivity: With a P/E of 83.44, even small earnings misses could trigger significant price movements
• Technical Overbought Risk: Trading above all major moving averages could increase pullback risk on disappointing results
• 30-day VaR (95% confidence): -17.31%, indicating potential for significant downside volatility
• Revenue Trajectory: 3-year CAGR of -13.6% highlights fundamental business model challenges

The market appears to be pricing in a successful business transformation that is not yet evident in the financial results, creating a significant disconnect between fundamentals and stock performance.

Bottom Line

GameStop enters this earnings report with a strong cash position but ongoing revenue challenges. The extreme divergence between analyst sentiment (Sell rating, $10 price target) and market behavior (stock up 52.92% YoY) creates a volatile setup for the earnings release.

The extraordinarily bullish options positioning (0.15 put-call ratio) suggests that traders expect positive surprises or continued disregard for traditional valuations. However, revenue contraction remains a fundamental concern that will likely need addressing for sustainable long-term appreciation.

Investors should be prepared for above-average volatility following the announcement, with technical support around the 50-day moving average ($24.96) potentially providing a floor in case of disappointing results.

Happy Investing!