TLDR
- GameStop reports Q2 2025 earnings Tuesday after market close with Wall Street expecting 19 cents EPS and $900M revenue
- Nintendo Switch 2 launch in June could boost GameStop’s quarterly results through console, software and accessory sales
- Company has beaten EPS estimates in 6 of past 8 quarters but missed revenue targets in 7 of 8 reports
- GameStop maintains strong balance sheet with $6.3B cash and $527M Bitcoin holdings as 20th largest holder
- High short interest at 15% could trigger squeeze if earnings beat expectations
GameStop stock gained ground Monday as traders positioned ahead of Tuesday’s Q2 2025 earnings release. The video game retailer closed up 2.85% as investors weighed the potential for an earnings beat.
Wall Street expects GameStop to report adjusted earnings per share of 19 cents on revenue of $900 million. That’s a massive jump from last year’s Q2 adjusted EPS of just 1 cent.
The revenue estimate of $900 million would mark GameStop’s first quarterly growth in some time. Analysts surveyed by Yahoo Finance project revenue rose 3.12% compared to the same period last year.
Nintendo’s Switch 2 launch on June 5 could be the game changer GameStop needs. The hybrid console became the fastest-selling game system in U.S. history with an estimated 7 million units sold.
GameStop had nearly a full quarter to benefit from Switch 2 sales. Console sales typically drive software and accessory purchases, creating multiple revenue streams for the retailer.
Mixed Earnings History Creates Uncertainty
GameStop’s track record with estimates tells a complicated story. The company has exceeded EPS expectations in six of its past eight quarters, showing decent profitability management.
Revenue tells a different tale entirely. GameStop fell short of sales estimates in seven of its last eight quarterly reports, highlighting ongoing business challenges.
The company’s annual revenue has declined steadily from $6 billion in 2021 to $3.2 billion last year. Gaming’s shift toward digital downloads continues pressuring physical retail sales.
Despite revenue headwinds, GameStop posted a $44.8 million profit last quarter. Analysts expect this profitability trend to continue with annual EPS projected at 73 cents.
Strong Balance Sheet Provides Cushion
GameStop enters earnings with one of retail’s strongest balance sheets. The company holds $6.3 billion in cash and short-term investments against just $1.4 billion in long-term debt.
The retailer also owns 4,710 Bitcoin worth approximately $527 million. This makes GameStop the 20th largest corporate Bitcoin holder, adding another layer to its investment story.
GameStop’s current assets total $7.1 billion, providing substantial financial flexibility. This cash position allows the company to weather continued industry headwinds while exploring new opportunities.
The stock has struggled year-to-date, falling 26.52% despite Monday’s gains. Shares remain down 6.76% over the past 12 months as investors question the company’s long-term prospects.
Wall Street maintains a Moderate Sell rating with a $13.50 price target, implying 41% downside from current levels.
GameStop stock trades with 15% short interest, among the highest in the market. Strong earnings results could trigger a short squeeze as bears rush to cover positions.
Daily trading volume remains elevated at 11.18 million shares, indicating continued investor interest. The stock has consolidated between $21 and $24.50 in recent weeks, setting up for a potential breakout.
