GME, GameStop Corp.
GameStop Corp. offers games, collectibles, and entertainment products through its stores and ecommerce platforms.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- Revenue is Hardware and accessories (51%), Collectibles (29%) and Software (20%).
- What moves the needle
- Sales per store and how fast inventory moves. What decides it: same-store sales, inventory turns, and whether thin margins survive a price war.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median −13%, above 15% in 0 of 4 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the 10-K is where you look.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →The biggest segment, United States, is also where the profit is made: 73% of revenue and 98% of segment operating profit.
- United States73%$2.7B98% of profit
- Australia14%$495M2% of profit
- Europe12%$429Mloss
- Canada1%$38Mloss
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2017–2026
realized figures from each filing, no estimates| 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | 2026’26 | TTMTTMMay 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $8.0B | $8.5B | $8.3B | $6.5B | $5.1B | $6.0B | $5.9B | $5.3B | $3.8B | $3.6B | $3.7B |
| Gross marginGross mgn | 31% | 29% | 28% | 30% | 25% | 22% | 23% | 25% | 29% | 33% | 34% |
| Operating marginOp. mgn | 6.0% | 5.1% | −8.5% | −6.2% | −4.7% | −6.1% | −5.3% | −0.7% | −0.7% | 6.4% | 10.3% |
| Net incomeNet inc. | $353M | $35M | ($673M) | ($471M) | ($215M) | ($381M) | ($313M) | $7M | $131M | $418M | $763M |
| EPS (diluted)EPS | $1.15 | $0.12 | $-2.22 | $-1.81 | $-0.83 | $-1.31 | $-1.03 | $0.02 | $0.33 | $0.76 | $1.29 |
| Owner earningsOwner earn. | $394M | $322M | $231M | ($493M) | $64M | ($496M) | $52M | ($239M) | $130M | $597M | $741M |
| Owner earnings marginOE mgn | 5.0% | 3.8% | 2.8% | −7.6% | 1.3% | −8.3% | 0.9% | −4.5% | 3.4% | 16.5% | 19.8% |
| ROICROIC | — | — | — | — | — | — | -105% | -4% | -13% | 7% | 13% |
| Cash & investmentsCash+inv | $665M | $854M | $1.6B | $499M | $509M | $1.3B | $1.4B | $1.2B | $4.8B | $9.0B | $8.4B |
| Net debt / (cash)Net debt | $151M | ($36M) | ($804M) | ($80M) | ($171M) | ($1.2B) | ($1.3B) | ($1.2B) | ($4.7B) | ($4.8B) | ($4.2B) |
Owner’s Scorecard
Will it survive?
- ComfortableOperating income $232M ÷ interest expense $27M
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- How heavy is the debt? 17.9×HighTotal debt $4.2B ÷ operating income $232M
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash +$4.8BNet cashCash $6.3B + ST investments $2.7B − debt $4.2B
Cash and short-term investments exceed every dollar of debt by $4.8B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Not enough data
The filing data didn't include the inputs for this check.
Is it a good business?
- Below averageNOPAT $232M ÷ invested capital $3.3B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Cash machineOwner Earnings $597M = operating cash $615M − capex $18M
What an owner could take out without starving the business. That's 16% of revenue. Treating stock comp as the real expense it is (less $27M of SBC) leaves $571M. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $615M ÷ net income $418M
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Reinvests most of itDividends + buybacks $0 ÷ Owner Earnings $597M
Of $597M Owner Earnings, $0 (0%) went back to shareholders, $0 dividends, $0 buybacks. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 0.31×HarvestingCapex $18M ÷ depreciation $56M
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2017–2026
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 5 of 10
Lost money in 5 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 0 of 4 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 6% (FY2017) → 6% (FY2026)
Margins held roughly steady across the record.
- Reinvestment, incremental ROIC 5%
Reinvested capital earned only a modest return, growth is getting expensive.
- Owner earnings growth +0%/yr
Free cash to owners grew about 0% a year over the record.
- Worst year 2019 · −8.5% op. margin
Operations went underwater in 2019, understand why before trusting the good years.
- Dividend record paid
Paid a dividend in 5 of the years on record.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2017–2026
Over the record, the business generated $1.2B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a mature cash machine, most of what it earns goes straight back to owners.
- Reinvested$675M · 55%
- Dividends$509M · 41%
- Buybacks$284M · 23%
It reinvested $675M (55%) back into the business and returned $793M (64%) to owners, $509M in dividends, $284M in buybacks. Total debt rose $3.3B across the span. It returned and reinvested more than it generated, the gap was covered by debt or existing cash.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- Stock-based compensation$27M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 12% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
3 of 5 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $3.6B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 15.30×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt PassDebt ≤ working capital · $4.2B vs $9.4B WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability MissA profit every year (10-yr record) · 5 loss years
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · 5 of 10 yrs
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth —Earnings +33% over the record · —
Earnings were negative early in the record, a growth rate isn't meaningful.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $0.76/share and book value $9.92/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what GameStop Corp. has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $741M on 592M diluted shares; net cash $4.2B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2026
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Pricing power & competitionBusiness
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“The gaming industry is intensely competitive and subject to rapid changes in consumer preferences and frequent new product introductions.”
From the recordOperating margin10.3% (TTM), near a 10-yr high - Concentrated dependenceBusiness
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“Quarterly results may fluctuate materially depending upon, among other factors, the timing of new product introductions and releases, adverse weather conditions, shifts in the timing of certain holidays or promotions and changes in our merchandise mix.”
From the recordOwner-earnings margin at stake (TTM)20% - Debt terms & refinancingRisk Factors
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“A default under one or both of the indentures or the 19 fundamental change itself could also lead to a default under agreements governing our future indebtedness.”
From the recordBalance sheet (TTM)+$4.8B net cash · interest covered 8.6× - Litigation & contingenciesRisk Factors
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“In the ordinary course of our business, we are, from time to time, subject to various litigation and legal proceedings, including matters involving wage and hour associate class actions, stockholder and consumer class actions, tax audits and unclaimed property audits by states.”
A judgment, not a number, weigh it against the filing yourself. - DilutionRisk Factors
Whether your slice quietly shrinks. New shares fund the company at the existing owner's expense.
“The CEO Performance Award, if and to the extent the Options become vested and are exercised, would result in dilution to stockholders, in respect of both voting and economics, and could impact the price of GameStop's common stock.”
A judgment, not a number, weigh it against the filing yourself. - Cyclicality & demandRisk Factors
How the business behaves when the economy turns. A cyclical earns its keep across the whole cycle, not at the peak.
“The gaming industry has historically been cyclical and is affected by the introduction of next-generation consoles, which could negatively impact the demand for existing products.”
From the recordWorst year on record−8.5% operating margin (FY2019) - Regulation & policyMD&A
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“Cash provided by financing activities in fiscal 2025 was driven primarily by $4,200 million of gross proceeds received from the issuance of convertible debt, partially offset by debt issuance costs related to the convertible notes and warrants, as well as repayments on our government-guaranteed low …”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2026 vs FY2025
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “We recorded an unrealized loss of $59.7 million related to the digital asset receivable during fiscal 2025, reflecting the decline in the market price of Bitcoin between the date the Bitcoin was derecognized and January 31, 2026. 30 In fiscal 2021, six separate unsecured term loans held by our Frenc…”
- “The loss reflects a $71.8 million realized loss recognized upon derecognition of our digital assets (Bitcoin) pledged as collateral in our covered call strategy, a $59.7 million unrealized loss on the resulting digital asset receivable, and a $0.1 million remeasurement loss on our remaining digital …”
- “The decline in the Canada segment reflects the divestiture of that business in the second quarter of fiscal 2025, while the decline in the Europe segment was primarily due to the divestiture of Italy and the closure of our operations in Germany, both completed during the second half of fiscal 2024.”
- “The overall decrease in consolidated net sales was primarily driven by a $276.1 million or 27.5% decline in software sales and a $259.3 million or 12.3% decline in hardware and accessories, partially offset by a $342.3 million or 47.7% increase in collectibles sales.”
- “In addition, burdensome requirements may be imposed on us, including registration as an investment company under the Investment Company Act, adoption of a specific form of corporate structure and reporting, limitations with respect to management, operations, transactions with certain affiliated pers…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Computer & Computer Software Stores
The same industry, side by side on owner economics, compare, don't rank by a single number. ● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| AMZNAmazon.com Inc. | $716.9B | 50% | 11.2% | 16% | 1% |
| WMTWalmart Inc. | $706.4B | 24% | 4.2% | 18% | 2% |
| COSTCostco Wholesale Corp. | $275.2B | 13% | 3.8% | 37% | 3% |
| HDHome Depot Inc. | $164.7B | 33% | 12.7% | 26% | 8% |
| TGTTarget Corp. | $104.8B | 28% | 4.9% | 16% | 3% |
| LOWLowe's Cos Inc. | $86.3B | 33% | 11.8% | 27% | 9% |
| GMEGameStop Corp. | $3.6B | 33% | 6.4% | 7% | 16% |