GME
GameStop Corp.
$24.25
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 31.0% above fair value
You pay
$24.20
Bear
$16.17
Fair
$18.48
Bull
$20.79
Bear
$16.17
-33.2%
$0.77 × 21x P/E
Fair
$18.48
-23.6%
$0.77 × 24x P/E
Bull
$20.79
-14.1%
$0.77 × 27x P/E
Adjust Assumptions
24.0x
0.77$
Key Value Driver
Normalized P/E multiple (24x base case)
Implied Market Multiple
31.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$18.25
Divergence from AlphaVal
1%
Summary
Applying a 24x P/E to adjusted EPS of $0.77, the base-case value is $18.48 per share. DDM cross-check: $27.80.
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