GameStop (NYSE: GME) posted a striking divergence in its most recent quarter, with operating income surging to $160.2 million from just $66.4 million a year earlier, even as total revenue declined 18.7%.
The driver behind that profitability leap is a business most investors once overlooked: collectibles, which generated $356.3 million in revenue during the second quarter, a 56.5% year-over-year increase.
That single category now accounts for roughly 45% of GameStop’s total sales, a mix shift that has fundamentally altered how analysts assess the company’s earnings quality.
StoneX became the latest firm to formalize that reassessment on Monday, initiating coverage of the stock with a Buy rating and a $33 price target.
Analyst Mike Hickey credited executive chairman Ryan Cohen with rebuilding the company’s earnings foundation, pointing to the growing collectibles segment as an additional source of durable upside.
GameStop has been methodically shrinking its traditional store footprint, reducing costs, and redirecting resources toward higher-margin product categories including trading cards and authentication services.
A partnership with PSA adds structural depth to that pivot, allowing GameStop locations to function as drop-off points for card grading and creating a recurring relationship with collectors rather than a transactional one.
StoneX is not the only firm making a bullish case: Yorkville Ives has separately argued that GameStop is evolving into a leaner collectibles and capital-allocation platform rather than a conventional retail chain.
The legacy video-game business continues to contract structurally, and total revenue remains under pressure, meaning the company’s financial health now depends heavily on collectibles outpacing the ongoing decline in its original core segment.
Capital-allocation decisions and outside investments introduce an additional layer of unpredictability, and GameStop’s history as a meme-stock vehicle means volatility remains a persistent feature of the stock.
What has changed is that institutional analysts are now framing the bull case around operating margins and category growth rather than social-media momentum, a shift that reflects how substantially the underlying business has been restructured.
Investors tracking the name will want to monitor collectibles revenue growth, operating margin trends, and store-level economics to gauge whether profitability can keep expanding even as the company’s headline revenue figure stays compressed.
