A company that was once written off as a dying retailer just posted operating income of $160.2 million, up from $66.4 million in the same period a year earlier, despite an 18.7% revenue decline.
That financial pivot at GameStop (NYSE: GME) has caught the attention of Wall Street, with brokerage StoneX initiating coverage this week with a buy rating and a price target of $33 per share.
The price target implies roughly 35% upside from where shares closed on Friday, a notable call on a stock still trading 72% below its all-time highs and carrying a market cap of $12.2 billion.
StoneX analyst Mike Hickey credited Chief Executive Ryan Cohen with rebuilding the company’s earnings foundation while positioning its collectibles segment as a meaningful new growth engine.
Collectibles revenue surged 56.5% to $356.3 million in the second quarter, accounting for approximately 45% of GameStop’s total sales, a dramatic shift in the company’s revenue mix.
The retailer has been deliberately shrinking its legacy store footprint, reducing overhead, and rotating toward higher-margin product categories such as trading cards and collectibles.
That strategy has produced a striking divergence between top-line contraction and bottom-line expansion, a pattern Hickey argues reflects a genuine business transformation rather than a temporary accounting quirk.
Yorkville Ives has also taken an optimistic view, characterizing GameStop as evolving into a leaner collectibles and capital-allocation platform rather than a conventional bricks-and-mortar game retailer.
Shareholders recently approved an expansion of GameStop’s authorized share count at the company’s annual meeting, providing flexibility to issue stock for strategic transactions, including a reported bid involving eBay.
The 52-week trading range of $17.79 to $28.30 illustrates how much uncertainty still surrounds the name, even as the operational picture brightens.
The legacy gaming business remains structurally challenged, physical game sales continue to erode, and the company’s growing exposure to external investments introduces additional volatility into its earnings profile.
Whether the StoneX initiation translates into sustained buying pressure will likely depend on Cohen’s ability to close a transformative deal and maintain profitability as the core gaming market keeps contracting.
