GameStop Is Heating Up, Analysts Now Say It’s Undervalued

June 9, 2025

Updated on July 8, 2025

June 9, 2025 – As GameStop Corp. (NYSE: GME) gears up to release its Q2 earnings after market close on Tuesday, June 10, 2025, a wave of optimism is building among investors, fueled by the company’s strategic pivot and a transformative financial overhaul.

With a cash-rich balance sheet, a bold Bitcoin investment strategy, and a leaner operational model, GameStop is positioning itself as a formidable player in the retail and investment landscape.

Here’s why GME stock, currently trading at $30.34, could be significantly undervalued and ready to surprise the market according to market experts.

GameStop’s Bitcoin Bet: A Game-Changer for Earnings

GameStop’s decision to allocate a portion of its treasury to Bitcoin has sparked intense excitement.

On March 25, 2025, the company announced it had purchased 4,710 Bitcoin, now valued at approximately $500 million at today’s price of $106,000 per BTC.

With the new FASB rule (ASU 2023-08) requiring companies to report unrealized gains and losses on crypto assets, GameStop’s Q2 earnings could see a significant boost.

Analysts estimate unrealized gains of $35.2 million in Q2 alone, translating to an additional $0.08 per share based on 447.1 million shares outstanding.

Investor sentiment on X is electric, with users like @Han_Akamatsu projecting that if Bitcoin climbs to $115,000 by earnings day, unrealized gains could contribute $0.46 to EPS, far exceeding Wall Street’s modest $0.04 EPS forecast for Q1.

Another user, @TheBTCTherapist, enthused, “GameStop now has $5.7 billion in cash and $500 million in magic internet money.

Send the f***ing rocket.”

This bold move positions GameStop to capitalize on Bitcoin’s upward trajectory, potentially delivering a windfall that analysts have yet to fully price in.

Financial Transformation: From Meme Stock to Cash Machine

GameStop has undergone a remarkable transformation, shedding its “meme stock” stigma to emerge as a financially disciplined powerhouse.

X user @ODB123 highlighted the company’s turnaround: “Net Income: –$470M ➝ +$131M Cash: $513M ➝ $4.775B Debt: $216M ➝ $17M FCF: –$138M ➝ +$146M.”

This shift, driven by CEO Ryan Cohen’s cost-cutting and strategic vision, has left GameStop with a war chest of $5.7 billion in cash and virtually no debt.

“GameStop is no longer just a retailer; it’s a cash-rich, debt-light, profitable machine,” @ODB123 added, echoing a growing consensus among retail investors.

The company’s free cash flow of $146 million and a net margin improvement from -7.3% to 3.4% signal operational efficiency that could drive sustainable growth.

Undervalued and Ready to Break Out

Analysts may be underestimating GameStop’s potential.

While Wall Street projects a 2026 EPS of $0.46, the inclusion of Bitcoin gains could push annual EPS to $0.63, with some optimistic projections reaching $1.00 over the next 12 months if Bitcoin continues its rally.

Kip Herriage of Vertical Research maintains a “BUY” rating on GME, with a 2025 price target of $50 and a potential to exceed $100 in 2026, contingent on the success of its Bitcoin strategy.

Technical analysts on X are equally bullish.

@blakestonks noted, “GME broke out of a five-month base & now retesting the breakout… Risk for longs should be a close below $29.50 – $28.00. Not bad r/r to grab commons.”

This technical strength, combined with fundamental improvements, suggests GME could be on the cusp of a significant rally.

Also Read: A Wall Street Fund Founder Now Files An Unexpected Bankruptcy

Why GameStop Could Outshine Expectations

Unlike its 2021 short-squeeze frenzy, GameStop’s current momentum is grounded in tangible financial progress.

The company’s core retail business has stabilized, with CEO Ryan Cohen stating, “The company today is profitable in the U.S. and we’ve gotten our costs under control.”

Coupled with its Bitcoin holdings, GameStop is diversifying its revenue streams, making it less reliant on traditional retail.

Investors on X are buzzing with anticipation.

@sierrastrades emphasized, “GameStop’s fundamentals are stronger than ever, and the Bitcoin play is a masterstroke.”

Meanwhile, @WRabbit741 pointed to GameStop’s history of beating estimates, noting its Q4 2024 EPS of $0.04 versus an expected -$0.03, a 200% beat.

With analysts potentially underestimating the impact of Bitcoin gains and operational improvements, GME could deliver a blockbuster earnings report.

GameStop’s Q2 earnings could be a defining moment, potentially catalyzing a re-rating of the stock as investors recognize its undervaluation.

With a cash pile rivaling many tech giants, negligible debt, and a savvy Bitcoin investment, GameStop is no longer just a nostalgic retail name—it’s a dynamic player in the evolving financial landscape.

But I’m curious to know what you think — Leave your thoughts below.

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