It’s been more than five years since GameStop (GME) turned Wall Street upside down and became the king of meme stocks. You may remember back in January 2021 when GameStop jumped 1,700% in a matter of days as part of a short squeeze spearheaded by retail traders on Reddit (RDDT). GameStop gave back much of those gains but still finished the year up nearly 700%, showing the influence retail investors can have when they work together.
GameStop is still alive, but the company is very different from what it was five years ago, having invested heavily in Bitcoin (BTCUSD) last year as part of a corporate treasury strategy. Earlier this year, it announced intentions to complete a “very, very, very big” purchase of a larger consumer company and to turn GameStop into a holding company much like Berkshire Hathaway (BRK.A) (BRK.B).
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And in May, it made an unsolicited bid to buy the much larger eBay (EBAY). GameStop planned to allow its 1,600 brick-and-mortar locations to become a national network to authenticate goods sold on eBay — and in turn, help the e-commerce company become a stronger competitor to Amazon (AMZN). But eBay rejected the offer.
Cohen and GameStop management still have ideas, though, and the latest one is a focus on its collectibles business. GameStop previously centered on selling and reselling video games and consoles, but as more game developers made games downloadable online rather than on physical discs, the retailer has been forced to look in a different direction. GameStop already sells a variety of collectible action figures, posable models, toys, and trading cards both at its physical locations and online, which made up a whopping 45% of the company’s sales in the second quarter. Is this a reason for investors to reconsider the former king of meme stocks?
www.barchart.com About GameStop Stock
GameStop, which is based in Grapevine, Texas, is a retailer that sells gaming hardware, software, and collectibles. The company has a market capitalization of $9.1 billion.
Shares are down 13% over the last year as it struggles to find its footing. It is underperforming the S&P 500 ($SPX), which is up 17% in the last year, while underperforming other companies in the consumer discretionary sector. By way of comparison, the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) is down only 3% in the last year.
The company’s forward price-to-earnings ratio is only 11.7, indicating that the meme stock premium that GameStop carried even as recently as Q4 2024, when it was over 400, has evaporated, and investors appear to be valuing the stock on its shrinking legacy video game business.
GameStop Has Mixed Results
GameStop’s revenue showed declines in the second quarter, but the company reported sharp increases in net income. Net sales fell 19% to $790.2 million, but net income jumped from $168.6 million to $298.7 million, a gain of 77%. Sales of collectibles increased 57% from a year ago to $356.3 million in the quarter. However, video game sales were down sharply — management attributed the drop to challenging comparables from the previous year, when the Nintendo Switch 2 was released.
| Segment | Net Sales, Q2 2026 | Percentage of Net Sales Q2 2026 | Net Sales, Q2 2025 | Percentage of Net Sales Q2 2025 |
| Collectibles | $356.3 million | 45.1% | $227.6 million | 23.4% |
| Video games | $263.2 million | 33.3% | $494.6 million | 50.9% |
| Pre-owned and refurbished consoles | $170.7 million | 21.6% | $250.0 million | 25.7% |
| Total | $790.2 million | 100% | $972.2 million | 100% |
Source: GameStop
“Consistent with our focus on the growth of collectibles, we continued to expand store space and roll out new fixtures dedicated to the category to support in-store collectibles sales,” management said in a filing with the Securities & Exchange Commission. “As a result of our efforts in this area, our collectibles product category increased to 45.1% of our net sales in the second quarter of fiscal 2026 compared to 23.4% in the second quarter of fiscal 2025.”
Management is projecting adjusted EBITDA of more than $650 million for the full fiscal year, up from its previous forecast of more than $600 million.
There’s Another Catalyst for GameStop Stock
GameStop has always been a stock with momentum — as retail investors get on board, the stock tends to move. And one thing that’s been moving it lately has been some insider buying — Cohen bought $20.4 million in shares on Sept. 10, while insider Lawrence Cheng purchased $1 million in stock. Those purchases have helped push GameStop stock up 10% in just a week. But whether or not it can hold those gains is another matter. GameStop isn’t a popular stock for analysts to follow, as its gains and drops have been largely driven by retail investors and not underlying fundamentals.
If you are a fan of Cohen, then the GameStop CEO’s purchase is likely meaningful, as is its success in the collectibles market. But GameStop is still too unsteady for me to recommend, so I’m staying on the sidelines.
On the date of publication, Patrick Sanders did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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