Value
7.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.4 |
| P/S | 8.5 |
| EV/EBITDA | 2.9 |
| Fwd P/E | 6.8 |
| PEG | 10.0 |
- ▸Forward P/E: 18.9x
- ▸PEG: 0.03
- ▸Attractively valued
GME · Why this verdict
Why GameStop (GME) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Four consecutive quarterly earnings beats with an average upside surprise of 123% — including a 325% beat in the earliest of the four quarters — demonstrate a sustained pattern of under-promising and over-delivering that gives the company's forward guidance more credibility than headline consensus estimates alone imply. Earnings | Thesis holds if the company posts a fifth consecutive positive earnings surprise in the September 2026 reporting quarter. | →Stable |
| CounterWith news sentiment running at -0.35 based on recent headlines and the stock sitting below its 200-day moving average, the beat streak may reflect managing to extremely depressed analyst expectations rather than genuine business acceleration; once estimates are reset higher, producing a positive surprise becomes materially harder. | ||
Despite strong reported net income and margins above 20%, free cash flow is negative relative to earnings — running at -165% of net income — meaning the company is consuming more cash than its income statement implies and leaving limited financial flexibility for capital allocation or reinvestment. Quality | The quality concern clears if free cash flow turns positive for 2 consecutive reporting quarters; it persists if the FCF-to-net-income ratio remains below 0%. | →Stable |
| CounterA Piotroski F-Score of 8 out of 9 and net margins above 20% indicate broad financial health and earning power across multiple dimensions that the free cash flow ratio alone does not capture, suggesting the cash generation picture may be more complex than a single ratio implies. | ||
With the stock below its 200-day moving average, a flat MA slope, falling On-Balance Volume, and a momentum score of 3.4 — below the minimum gate of 4.5 — the near-term price path faces meaningful headwinds absent a significant catalyst to shift institutional positioning. Momentum | Momentum recovers if the stock crosses above its 200-day moving average and On-Balance Volume turns higher over the next 2 months. | →Stable |
| CounterThe price action is range-bound with an RSI near 48 and mid-Bollinger positioning, suggesting consolidation rather than a confirmed downtrend; the four-quarter beat streak provides a recurring catalyst that could jumpstart buying pressure and flip the technical picture quickly. | ||
With short interest at 14% and a put/call ratio of 1.33, bearish market participants are positioned for continued weakness; this overhang limits near-term upside and introduces event-driven volatility risk around key catalysts. Risk | The overhang resolves if short interest falls below 8% over the next quarter, reflecting meaningful short covering driven by improving fundamentals. | →Stable |
| CounterThe existing four-quarter beat streak demonstrates the company's capacity for large upside surprises; if the next quarterly print delivers another outsized beat, the elevated short and put positioning could rapidly unwind into buying pressure and amplify any rally. | ||
Four consecutive quarterly earnings beats with an average upside surprise of 123% — including a 325% beat in the earliest of the four quarters — demonstrate a sustained pattern of under-promising and over-delivering that gives the company's forward guidance more credibility than headline consensus estimates alone imply.
→StableEarnings
- Expectation
- Thesis holds if the company posts a fifth consecutive positive earnings surprise in the September 2026 reporting quarter.
CounterWith news sentiment running at -0.35 based on recent headlines and the stock sitting below its 200-day moving average, the beat streak may reflect managing to extremely depressed analyst expectations rather than genuine business acceleration; once estimates are reset higher, producing a positive surprise becomes materially harder.
Despite strong reported net income and margins above 20%, free cash flow is negative relative to earnings — running at -165% of net income — meaning the company is consuming more cash than its income statement implies and leaving limited financial flexibility for capital allocation or reinvestment.
→StableQuality
- Expectation
- The quality concern clears if free cash flow turns positive for 2 consecutive reporting quarters; it persists if the FCF-to-net-income ratio remains below 0%.
CounterA Piotroski F-Score of 8 out of 9 and net margins above 20% indicate broad financial health and earning power across multiple dimensions that the free cash flow ratio alone does not capture, suggesting the cash generation picture may be more complex than a single ratio implies.
With the stock below its 200-day moving average, a flat MA slope, falling On-Balance Volume, and a momentum score of 3.4 — below the minimum gate of 4.5 — the near-term price path faces meaningful headwinds absent a significant catalyst to shift institutional positioning.
→StableMomentum
- Expectation
- Momentum recovers if the stock crosses above its 200-day moving average and On-Balance Volume turns higher over the next 2 months.
CounterThe price action is range-bound with an RSI near 48 and mid-Bollinger positioning, suggesting consolidation rather than a confirmed downtrend; the four-quarter beat streak provides a recurring catalyst that could jumpstart buying pressure and flip the technical picture quickly.
With short interest at 14% and a put/call ratio of 1.33, bearish market participants are positioned for continued weakness; this overhang limits near-term upside and introduces event-driven volatility risk around key catalysts.
→StableRisk
- Expectation
- The overhang resolves if short interest falls below 8% over the next quarter, reflecting meaningful short covering driven by improving fundamentals.
CounterThe existing four-quarter beat streak demonstrates the company's capacity for large upside surprises; if the next quarterly print delivers another outsized beat, the elevated short and put positioning could rapidly unwind into buying pressure and amplify any rally.
TrendMatrix Research · core thesis
Engine thesis — one sentence
A perfect four-quarter earnings beat streak with an average upside surprise of 123% demonstrates disciplined execution against expectations, but negative free cash flow, elevated short interest, a put/call ratio above 1.3, and zero upside to the technical target create a setup where fundamental progress and tactical conditions are pointing in opposite directions.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.7 |
| ROA | 1.8 |
| Gross margin | 2.9 |
| Op margin | 6.6 |
| Net margin | 10.0 |
| Current ratio | 5.0 |
| FCF quality | 0.0 |
| Moat | 6.1 |
| Piotroski F | 8.9 |
- ▸Strong margins: 20%
- ▸Earnings quality RED FLAG: -165% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
6.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 6.0 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.5 |
| Volume | 2.5 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $90,715 (0.001% of mkt cap)
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 6.1 |
| growth rank | 7.9 |
- ▸Best-in-class margins
Technical
2.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 1.3 |
| 52w position | 4.7 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.0 |
| days to cover | 0.4 |
| volatility | 6.3 |
| put call | 7.1 |
| implied vol | 4.0 |
| beta | 4.1 |
| debt equity | 6.5 |
| news risk | 5.0 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:67d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- DEATH_CROSS:momentum=6.7>=5.0 recovering
Reward-to-Risk
0.00
Upside
+0.0%
Downside
8.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 58
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.76>1.3
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.7>=5.5. Top dim: Catalyst at 7.6; weakest: Technical at 2.1. No conviction either direction.
The strongest dimensions are Catalyst at 7.6, Value at 7.5, and Momentum at 6.7; the weakest are Technical at 2.1, Risk (lower is worse) at 4.5, and Insider at 5.0. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise falls below 0% in any upcoming quarter, breaking the 4-quarter consecutive beat streak.
- P2Negative Free Cash Flow Quality Risk
Trip ifFree cash flow turns positive (FCF-to-net-income ratio rises above 0%) for 2 consecutive quarters, removing the earnings quality concern.
- P3Momentum And Technical Deterioration
Trip ifStock crosses above its 200-day moving average and momentum score rises above 4.5 for 2 consecutive months.
- P4Short Interest Options Sentiment Overhang
Trip ifShort interest falls below 5% of float for 2 consecutive months, indicating the bearish positioning overhang has been substantially absorbed.