In drupal 8, default location of screenshot is DRUPALROOT/themes/custom/MYTHEME/screenshot.png

We need rename above PNG image to screenshot.png and put it to theme's directory

Specify an alternative file location

Scenario 1: Different file name; saved in your theme's root directory.

If your screenshot called screenshot_icecream that saved in theme root directory.

-> Add new line to your theme's info file : screenshot: screenshot_icecream.png

Scenario 2: Saved in images directory of your theme.

If your screenshot image called screenshot_icecream is saved in the images directory of your theme.

-> Add new line to your theme's info file : screenshot: images/screenshot_icecream.png