QS Research · Michael Burry's Scion Capital analyst template · 2006
GameStop Corp. (GME)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -46% · downside -77% · upside -16%
The market pays 23.6x TTM EV/EBITDA, the highest multiple in the comparables set, for EBITDA that is a TTM peak at $499.5M and backed by one positive operating year in six. I do not use a cycle average because FY2021-FY2026 operating income averages -$124.4M; the call rests on TTM EBITDA $499.5M versus FY2026 EBITDA of $251.6M, so the normalization is not doing the work. At peer multiples of 7.9x-19.5x and $896M net cash, the value is $5.71-$21.09 per share against $25.12; the base 12x case is $13.66, or -46%. That is a short: the price needs about $604M EBITDA merely to hold at 19.5x and about $982M at 12x, while Q2 FY2026 sales fell 18.7% and Sony ends new PlayStation disc production in 2028. The raised >$650M Adjusted EBITDA guide and the $2.0B buyback are the main risks to the short.
Key numbers
- Share price: $25.12
- Market cap: $12.67B
- Latest financial period: TTM to Aug 1, 2026
- Revenue (TTM): $3.55B
- EV / EBITDA (TTM): 23.6x
- P/E (TTM): 14.2x
- Price / book: 2.06x
The 15 boxes
- ✓ 1. Long-form business notes
Latest 10-K describes GameStop as a games, collectibles and entertainment retailer selling through stores and ecommerce, now with a capital-allocation pillar alongside retail operational excellence; at Jan 31 2026 it had 2,206 stores in three geographic segments. From fiscal year ended 2021-01-30 to 2026-01-31, revenue fell from $5.09B to $3.63B while operating income moved from -$237.8M to $232.1M; the store base fell from 4,816 to 2,206 and Canada was divested. The sources are annual only and do not provide TTM, segment profit or unit economics.
- ✓ 2. Competitive advantage
Nothing in the filings shows a durable advantage: operating income was negative in each of FY2021-FY2025 and only turned positive in FY2026 ($232.1M), and even then net income ($418.4M) sits above pre-tax income ($384.0M) above operating income, so the bottom line is not a retail result. The company competes head-on with Walmart, Target, Best Buy and Amazon.com, and with its own suppliers - Sony, Microsoft and Nintendo - selling direct through PSN, Xbox Live and Switch Online while downloads take a growing share of new game sales. Its collectibles profit leans on vendor-allocated trading cards (notably Pokemon), and the 10-K concedes pricing and spending responses to competition would hurt results. Registered marks (GameStop, EB Games, GameStop Pro) exist, but no source quantifies brand or loyalty value.
- ✓ 3. 10-Q takeaways
The Q2 FY2026 10-Q (quarter ended 2026-08-01) shows sales down 18.7% to $790.2 million against a prior-year Switch 2 launch quarter, but gross margin up sharply to 43.7% on a collectibles mix shift and operating income of $160.2 million versus $66.4 million. Reported net income of $298.7 million is not an operating number: it carries a $166.3 million derivative gain, a $72.1 million unrealized equity gain and a $75.0 million digital-asset loss. Cash, cash equivalents and marketable securities fell to $5,060.3 million at 2026-08-01 from $9,013.8 million at 2026-01-31, mainly on the eBay equity purchase, and nothing was bought back under a new $2.0 billion authorization.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.