GameStop’s Earnings Just Changed the Bull Case. We See 100% Upside

GameStop’s Earnings Just Changed the Bull Case. We See 100% Upside

Vandita Jadeja

Wed, September 9, 2026 at 4:30 PM GMT+3 5 min read

Quick Read

• GME collectibles revenue surged 57%, driving gross margin from 29% to 44% and powering a BUY rating with a $40 price target.

• GameStop's $650M EBITDA guide dwarfs Funko's $110M target, while its collectibles margin advantage over Best Buy makes the 14x forward multiple defensible.

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GameStop (NYSE:GME) just delivered a Q2 FY2027 report that materially reshaped the bull case. Collectibles are now the dominant revenue line, gross margin nearly doubled versus the prior year, and management raised the fiscal 2026 Adjusted EBITDA guide.

My 24/7 Wall St. price target for GME is $40.26 over the next 12 months, versus a current price of $18.89. That implies 113.15% upside, with our proprietary model registering a buy at high confidence.

24/7 Wall St. Price Target Summary

A Quiet Stock Hiding a Loud Earnings Report

GME shares have been muted despite the operating turn. The stock is down 5.93% year to date and 18.65% over the past year, essentially flat over the past week.

Q2 FY2027 revenue of $790.20 million beat estimates by 4.41%, while adjusted EPS of $0.27 met consensus. Adjusted EBITDA came in at $174 million against $75.70 million a year earlier, and a full-year Adjusted EBITDA guide raised to in excess of $650 million. Our sister coverage at 24/7 Wall St. flagged that GameStop's next big move could matter more than its earnings, a reference to the still-unresolved eBay stake and capital allocation questions.

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Why Bulls See a Breakout Ahead

Collectibles revenue reached $356.30 million, growing 57% and accounting for 45.1% of net sales. That mix shift drove gross margin to 43.7% from 29.1%.

Bulls point to $4.85 billion in cash, a $2 billion buyback authorization, and an eBay stake worth roughly $4.9 billion. Our bull-case one-year target sits at $43.09. Options positioning also skews long, with a full-chain put/call ratio of 0.23.

What Could Go Wrong

Video Games revenue fell to $263.20 million from $494.60 million, and total revenue declined 18.72% year over year. GAAP net income was flattered by a $166.30 million derivative gain and offset by a $75 million loss on digital assets.

Bulls counter that the video-game weakness reflects planned store closures, the France divestiture, and the absence of a prior-year Switch 2 launch, all lapping items. Our bear-case one-year target is $30.56, still comfortably above the current price.

How GameStop Compares to Best Buy and Funko

Best Buy (NYSE:BBY) is the diversified consumer-electronics retail contrast. Best Buy just raised its FY27 adjusted EPS guide to $6.70 to $6.90 on 4.1% comparable sales growth, valuing the shares near 12 times forward earnings.

GameStop trades at an implied forward multiple of roughly 14 times on our forward EPS estimate, which looks reasonable given the collectibles-driven margin expansion Best Buy cannot replicate at scale.

Funko (NASDAQ:FNKO) is the closest pure-play collectibles comp. Funko's Core Collectibles segment grew 9% in Q2 2026, versus GameStop's 57%, with full-year Adjusted EBITDA guided to $100M to $110M.

GameStop's raised guide of over $650 million dwarfs that, yet Funko still trades at a premium multiple. That gap is exactly why our 24/7 Wall St. price target of $40.26 looks reasonable.

GameStop Price Prediction 2026-2030

The 24/7 Wall St. price target is $40.26, the recommendation is buy, and confidence is 90%. The pivotal variable is collectibles margin durability. The setup strengthens if collectibles growth stays above 30% next quarter, and weakens if Video Games revenue keeps falling faster than store-count reductions can offset.

These projections assume GameStop continues scaling its collectibles mix and preserving the investment portfolio. Significant upside or downside could result from the proposed eBay transaction or an adverse move in digital-asset holdings.

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