Can You Look at This Meme Stock as a Serious Business Turnaround Play?

Ryan Cohen, the entrepreneur who built Chewy into a thriving e-commerce success story, has put his money where his mouth is—again. Recent SEC filings show that the GameStop CEO purchased 500,000 shares at approximately $21.12 per share, representing a $10.5 million investment. This move brings Cohen’s total ownership stake to over 9% of the company. For a stock that’s been synonymous with retail trading mania, insider buying of this magnitude typically signals strong conviction about the company’s direction.

But does this $10 million bet mean it’s time for investors to reconsider this famous meme stock?

The Signal Behind the Insider Move

Insider purchases, especially at this scale, often indicate management’s belief in future value creation. Cohen hasn’t been passive since taking the CEO role in late 2023. He’s been systematically reshaping a company that many wrote off as a relic of the physical retail era. The fact that GameStop’s single Wall Street analyst projects nearly $1 in EPS for 2026 and revenue of $4.16 billion (both representing year-over-year growth) suggests at least some experts see a viable path forward for the company.

What makes Cohen’s investment noteworthy isn’t just the dollar amount—it’s the timing and the confidence it represents about GameStop’s business transformation.

The Transformation in Action: Where GameStop Is Actually Growing

Here’s where the financial picture gets interesting and contradictory. The company’s largest business segment, hardware (video game consoles and related products), has declined about 5% through the first ten months of 2025. Meanwhile, software sales have tumbled 27% year over year—a serious headwind that traditional video game retailers simply can’t ignore.

Yet there’s a bright spot: collectibles revenue surged 55% in the same period. This segment—encompassing apparel, trading cards, toys, and gadgets—represents Cohen’s bet that GameStop can evolve beyond just selling games.

The stock has fallen about 21% over the past year, but the underlying business metrics tell a more nuanced story. The company has aggressively reduced costs and trimmed its brick-and-mortar footprint, which has yielded improved operating cash flow. Through the first nearly ten months of 2025, GameStop generated $0.67 in diluted earnings per share—a significant improvement from the same period a year prior.

The Valuation Question: Are Investors Paying a Premium for Potential?

With a $9.7 billion market capitalization, GameStop trades at roughly 2.3 times revenue and approximately 22 times forward earnings. On the surface, that’s not astronomical. However, the calculus becomes more complicated when you consider what investors are actually betting on.

GameStop’s hardware business—still its largest revenue driver—hasn’t stabilized. The software division continues to shrink. The collectibles business is thriving, but it’s not yet large enough to offset declines elsewhere. The company remains in transition, trying to prove it can sustain growth beyond cost-cutting measures.

Should You Really Look at This Meme Stock Again?

The situation has undeniably improved since Cohen arrived. The company’s financial foundation is stronger. Operating cash flow is heading in the right direction. But improvement doesn’t necessarily equal investment opportunity.

For this meme stock to justify its current valuation, revenue growth needs to materialize—not just quarterly cost reductions. The collectibles momentum is encouraging, but GameStop must demonstrate it can build a sustainable, diversified business model that doesn’t rely on hardware sales or nostalgia-driven trading volume.

Cohen’s $10.5 million purchase is encouraging for believers, but even bullish insiders can be wrong about timing and execution. Until GameStop proves it can stabilize its core business while scaling its growth engines, this remains a bet on management’s vision rather than a company with demonstrated, repeatable profitability.