GameStop (GME) Faces A Fresh Test Following Its Partnership Shift And Undervalued Narrative

GameStop (GME) is back in focus after reports that CEO Ryan Cohen is weighing whether to withdraw the company’s proposed $56 billion takeover of eBay and shift toward a partnership structure instead.

See our latest analysis for GameStop.

GameStop’s recent move to reconsider the eBay takeover comes after a period where momentum has cooled, with the share price down 13.33% over 30 days and total shareholder return down 15.17% over the past year.

If this type of deal making has you thinking about where else growth stories could emerge, it may be worth scanning 19 top founder-led companies

GameStop is now considering a smaller, partnership-style strategy after exploring a potential $56 billion eBay takeover. Given that shift and the recent share pullback, does the current balance of risk and reward still favour buyers, or not?

Most Popular Narrative: 91.5% Undervalued

According to the most followed GameStop narrative, the fair value of $220 sits far above the last close of $18.79. That gap rests on very specific assumptions about profits, cash, and how aggressively the balance sheet might be used.

GameStop Corp. (NYSE: GME), FY2025 Annual Review
The Transformation Is Complete. Now Comes the Deployment.
Price Target: $220 | Current Price: ~$23 | Date: April 2, 2026
Executive Summary
GameStop's fiscal year 2025 (ended January 31, 2026) marks the definitive inflection point. The company posted $418.4 million in net income, a very large increase over the prior year's $131.3 million, on $3.63 billion in revenue. Operating income swung from a loss of $26.2 million to a profit of $232.1 million. Free cash flow hit $597.3 million. The cash pile reached $9.01 billion. SG&A expenses dropped another 19.5% to $910.2 million.
These are not the numbers of a struggling retailer. These are the numbers of a company that has completed a surgical transformation under Ryan Cohen's leadership and is now sitting on a loaded balance sheet, waiting to deploy capital into an acquisition.

Read the complete narrative.

Want to see how this GameStop narrative gets from today’s $18.79 to a triple digit fair value? The story leans on profit mix, interest income, and acquisition-heavy assumptions that could sharply change earnings power. Curious which revenue mix shifts and margin levels sit behind that $220 figure? The full narrative lays out the playbook in detail.

Result: Fair Value of $220 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this GameStop narrative could unravel if acquisition plans disappoint or if shrinking legacy retail revenues and volatile Bitcoin holdings begin to weigh on earnings power.

Find out about the key risks to this GameStop narrative.

Next Steps

With sentiment on GameStop split between optimism and caution, it can help to move quickly, test the assumptions, and check the data for yourself. To see the full picture of what investors are currently optimistic about, review the 2 key rewards

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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