GameStop Corp. (GME) reported strong free cash flow (FCF) results on Tuesday, Sept. 9, for its quarter ending Aug. 2. GME stock looks deeply undervalued as a result. Analysts still don’t cover it, but my Sum-of-the-Parts (SOTP) assessment is over $31 per share.
GME closed at $24.93 on Friday, Sept. 12, up from $22.94 before the results release, and up from a recent trough of $22.14 on June 12.
GME stock – last 6 months – Barchart – As of Sept. 12, 2025
But, based on its revenue and free cash flow (FCF) performance on Sept. 9 (as well as its strong balance sheet), GME stock could have considerable upside. This article will show why.
GameStop reported that fiscal Q2 net revenue rose +21.78% Y/Y from $798.3 million last year to $972.2 million. This was even though GameStop now has significantly fewer stores open than a year ago.
For example, last quarter it sold all its stores in Canada, including its e-commerce business there. That represented 4.7% of its Q2 2024 sales. It is also set to divest its French stores.
GameStop closed 590 stores in 2024, and it said in the latest 10-Q filing, “we anticipate closing a significant number of additional stores in fiscal 2025.”
So, to see sales rise over 21%, despite these closures, is impressive. It implies that the remaining stores, on a like-for-like basis, are doing exceedingly well. Curiously, the company does not report its “same-store” sales revenue, but just total revenue.
That might imply that investors can continue to anticipate revenue increases, as apparently, store sales and e-commerce are becoming more efficient at GameStop.
This is apparent, by the way, as Q2 sales exceeded analysts’ expectations. Seeking Alpha reports that the revenue “beat” was $148.96 million (i.e., analysts were only expecting $823.24 million). That implies a huge revenue surprise of +18%.
However, only 1 or 2 analysts are covering GME stock, so it is not widely followed by Wall Street. This may begin to change if the company’s revenue continues to gain momentum.
One area that…
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