GameStop (GME) opened Q1 2027 with revenue of US$835.3 million and basic EPS of US$0.87, while trailing 12 month basic EPS stood at US$1.70 on net income of US$763.2 million. Over the past year, revenue on a trailing basis has moved from US$3.67 billion to US$3.73 billion, and quarterly EPS has ranged from US$0.10 in Q1 2026 to US$0.87 in the latest quarter. With trailing net profit margins widening from 5.6% to 20.4% over the same period, the latest results put profitability firmly in focus for investors watching how durable this earnings profile might be.

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With the headline numbers on the table, the next step is to see how this profitability story lines up with the most common narratives around GameStop and where the fresh data pushes back against the crowd.

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Trailing EPS and Net Income Step Change

• Over the last 12 months, basic EPS moved to US$1.70 and net income reached US$763.2 million, compared with US$0.49 EPS and US$208.4 million net income a year earlier on a trailing basis, highlighting how different the current profit profile looks versus that prior period.
• What is striking for a bullish view is how this trailing jump lines up with quarterly data, which shows basic EPS moving from US$0.10 in Q1 2026 to US$0.87 in Q1 2027, and trailing earnings growing by 267.7% over the past year.
  • Supporters who focus on multi year results may point to the 70.5% annualized earnings growth over five years and continuous profitability over that window as evidence that the current level of profit is backed by a longer track record.
  • At the same time, anyone leaning bullish still needs to separate the one year acceleration in EPS from the five year history to judge how much of this very large 267.7% trailing uplift feels repeatable versus being tied to a particularly strong recent stretch.

On top of that, some investors will want to see how this earnings shift fits into the wider GameStop story before they firm up a long term view on the stock Curious how numbers become stories that shape markets? Explore Community Narratives.

20.4% Net Margin vs 5.6% Prior

• Trailing net profit margin now sits at 20.4% compared with 5.6% a year earlier, and that aligns with net income rising on a trailing basis from US$208.4 million to US$763.2 million while revenue moved from US$3.67 billion to US$3.73 billion over the same periods.
• Bears might look at this shift and argue that a move from mid single digit to just above 20% margins could prove hard to maintain, especially since trailing revenue only changed modestly while profit expanded much faster.
  • Critics will likely flag that when profit grows much faster than revenue, as seen in the trailing figures, a lot of the story sits in costs or mix, so they may watch future filings closely to see whether margins remain around 20% or trend back toward earlier levels.
  • On the other hand, the description of high quality past earnings over the last five years means bearish arguments that profits are purely a one off spike do not fully line up with the longer record of consistent profitability.

P/E of 13x and DCF Gap

• Using the trailing 12 month EPS of US$1.70 and the current share price of US$22.18, the stock trades on a P/E of about 13x, which sits below the US Specialty Retail industry average of 19.6x and a peer average of 29.3x, while the DCF fair value of US$69.85 is well above the current price.
• For investors weighing a bullish angle, this combination of a P/E below both industry and peer averages and a DCF fair value that is US$47.67 above the current share price heavily supports the idea that the market is not fully reflecting the recent 267.7% trailing earnings growth.
  • Supporters may point out that the company has been profitable for at least five years and that trailing net margin is 20.4%, which helps explain why a valuation gap can exist when the focus is on trailing profits rather than short term revenue moves.
  • What stands out, though, is that any bullish case built on this valuation gap still rests on how investors interpret the durability of those trailing margins and earnings, because no forward revenue or earnings forecasts are supplied in the data to anchor expectations.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for GameStop on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If the combination of strong margins and valuation gaps has you interested, consider forming your own view using the full picture on 2 key rewards.

See What Else Is Out There

GameStop's recent profit profile leans heavily on a very large margin jump without matching revenue momentum. This raises questions about how consistent this setup might be.

If you want ideas where pricing may better reflect earnings strength, compare this situation with companies featured in the 47 high quality undervalued stocks to see potentially more balanced setups.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.