Although it's been several years since GameStop (GME +0.04%) truly went parabolic, the stock has stayed in the limelight and maintained a fervent crowd ever since. Chewy founder Ryan Cohen got involved in the stock in the early days of meme mania, but didn't become CEO until late 2023.
Cohen has been trying to figure out the company's direction, especially considering that the brick-and-mortar video game strategy is clearly a declining business. But it's also clear that Cohen is a big believer in GameStop's future.
Recently, Securities and Exchange Commission (SEC) filings revealed that Cohen had purchased 500,000 shares of GameStop stock, at an average cost of approximately $21.12 per share. That's a total purchase price of over $10.5 million. Cohen now owns over 9% of the company's outstanding shares.
Insider buying like this tends to signal bullish sentiment. Is it time for investors to take another look at this famous meme stock?
Image source: Getty Images.
Is GameStop becoming a promising company?
Since becoming CEO, Cohen has tried several strategies to revitalize the business. GameStop has waded into the world of collectibles and used firm capital to purchase Bitcoin, mimicking a Bitcoin treasury strategy. The stock is down about 21% over the past year.
Through the first nearly 10 months of 2025, GameStop has seen about a 5% decline in hardware, its largest business, which involves selling video game consoles and other related hardware. The company's software business, which now accounts for the smallest share of revenue, has seen revenue plummet 27% year over year. However, GameStop's collectibles business, which includes the sale of apparel, toys, trading cards, and gadgets, has seen revenue grow 55% in this period.
GameStop has also been reducing expenses and selling off assets by shrinking its brick-and-mortar footprint. Through the first nearly 10 months of the year, the company significantly increased operating cash flow and generated $0.67 of diluted earnings per share, much improved from the same period a year ago.
NYSE: GME
Key Data Points
Ultimately, GameStop's financials are in much better shape. The hardware business is not seeing a significant decline; the software business continues to leak; and collectibles is showing strong growth. Investors will be tasked with determining at what point, if at all, revenue can inflect and return to growth.
Only one Wall Street analyst covers GameStop, according to Yahoo! Finance. This analyst projects nearly $1 of EPS in 2026 and total revenue of $4.16 billion, both of which reflect year-over-year growth. With a $9.7 billion market cap, that means GameStop trades at about 2.3 times revenue and close to 22 times forward earnings.
While GameStop can likely continue to cut costs, the earnings multiple seems rich for a company that has yet to stabilize revenue in its largest business and is still trying to figure out its future. The situation has improved, but I'm still avoiding it right now.
