GME
GameStop Corp.
$21.44
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 16.5% above fair value
You pay
$21.44
Bear
$16.11
Fair
$18.41
Bull
$20.71
Bear
$16.11
-24.9%
$0.77 × 21x P/E
Fair
$18.41
-14.1%
$0.77 × 24x P/E
Bull
$20.71
-3.4%
$0.77 × 27x P/E
Key Value Driver
Normalized P/E multiple (24x base case)
Implied Market Multiple
27.8x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $18.25 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $18.41 per share.
Warnings
The company pays out 197% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $27.80 (above our primary estimate by 50%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples