Gamer mecca GameStop (NYSE:GME) reports its fiscal third-quarter 2008 earnings bright and early Thursday morning. Want to know what Wall Street expects to see? Read on. Want to know what really matters? Read on a bit more.

What analysts say:

  • Buy, sell, or waffle? Sixteen analysts give GameStop 14 buy ratings and two holds. (Does this kind of cheerleading make anyone else nervous?)
  • Revenue. On average, analysts expect to see sales grow 13% to $1.82 billion.
  • Earnings. Profits are predicted to rise 12% to $0.37 per share.

What management says:
The big news at GameStop this quarter was its $700 million buyout of French gaming retailer Micromania. (Good news for investment bankers, incidentally, who've endured a mergers-and-acquisitions drought of late -- Bank of America (NYSE:BAC) gets to make money funding the acquisition, and Citigroup (NYSE:C) collects fees for organizing the deal.) This purchase gives GameStop its first entry into the French market, as well as boosting its European store count to nearly 1,100 shops and its global footprint to 5,900 -- if it goes through. The European Commission has not yet approved the deal, which is expected to close this month if it does.

According to management, bringing Micromania into the fold will help GameStop grow profits at a brisk 25% clip through 2009.

What management does:
Not that GameStop necessarily needs the help. It's been doing just fine growing its profits lately. In addition to growing like a weed revenue-wise, the company has plumped up its take on the bottom line over the last 18 months, and now nets 4.5% out of every revenue dollar it takes in. That's better than diversified rival Best Buy (NYSE:BBY) manages; better than Amazon.com (NASDAQ:AMZN) as well.

Margins

5/07

8/07

11/07

2/08

5/08

8/08

Gross

27.3%

26.6%

25.8%

25.6%

25.4%

25.5%

Operating

6.5%

6.5%

6.6%

7.1%

7.2%

7.4%

Net

3.1%

3.2%

3.5%

4.1%

4.3%

4.5%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
So will someone please explain to me why, with all this growth ahead of it, GameStop stock is still selling for a measly 10 P/E? Sure, 25% growth won't last forever, but the analysts tracking GameStop still foresee 20% growth lasting for the next half-decade.

Hey ... on second thought, maybe we don't need to be nervous about all the analyst cheerleading after all. Looks to me like this one's a no-brainer, folks. Whatever news GameStop produces Thursday, at this price, I simply don't see how long-term investors can fail to succeed with this stock.

But do the master investors at Motley Fool Stock Advisor agree with my assessment of their recommendation? Take a free trial and find out. Or head over to GameStop's page on Motley Fool CAPS to see what our investing community thinks about this four-star stock.

Bank of America is a Motley Fool Income Investor selection. Best Buy is a Motley Fool Inside Value pick. GameStop, Best Buy, and Amazon.com are Motley Fool Stock Advisor picks. The Fool owns shares of Best Buy.

Fool contributor Rich Smith does not own shares of any company named above. Why do we tell you this? Because The Motley Fool has a disclosure policy.