Mon Oct 27 04:00:00 UTC 2025: ## GameStop: Value Play or Meme Stock? Reddit User Sees “Asymmetric” Upside
[City, State] – October 12, 2024 – GameStop Corp. (GME) is once again under the spotlight, not for meme-driven volatility, but for a potential value play opportunity, according to a bullish thesis posted on the Value Investing subreddit by user AlternativePaint6.
With GameStop shares trading around $24.35 on October 7th and a trailing P/E of 34.02, the user argues that the market is mispricing the stock due to its past as a “meme stock,” despite significant operational improvements under Ryan Cohen’s leadership.
The thesis hinges on Cohen’s two-phase strategy. Phase one focused on stabilizing the business through cost-cutting, store closures, and operational streamlining. This has reportedly led to profitability, even amidst temporary revenue declines and stock dilution. Phase two centers on growth and digitalization, with a focus on high-margin digital products, collectibles monetization, and leveraging the company’s loyal customer base.
Recent financial results support this claim, with the first two profitable quarters in Q1 and Q2 2025 showcasing revenue growth, particularly a 63% surge in collectibles revenue. Strategic partnerships, like the one with PSA for card grading, are also highlighted as creating a superior ecosystem compared to competitors like eBay.
The user points to GameStop’s robust cash reserve of around $8 billion, nearly matching its $10 billion market capitalization, as providing a substantial downside floor. This valuation suggests the operating business, including the profitable base, PSA partnership, and brand recognition, is only being valued at around $2 billion, implying an adjusted operating P/E of 4-11, significantly below comparable companies.
AlternativePaint6 projects significant upside potential in the collectibles market. They estimate that capturing just 5% of the U.S. collectibles market could generate $1 billion in annual profits, potentially supporting a stock price of $50-$100, or even higher.
This bullish view echoes a similar thesis on DICK’S Sporting Goods (DKS) covered earlier this year, which highlighted strong fundamentals and attractive valuation. Since that coverage, DKS stock has reportedly risen by over 25%.
While hedge fund interest in GameStop has slightly decreased, institutional ownership is reported to be around 45%. Despite this, some analysts remain cautious, pointing to potentially greater upside and lower risk in certain AI stocks.
Investors should conduct their own thorough research before making any investment decisions. The “meme stock” label still carries baggage, and the future success of GameStop’s turnaround remains to be seen.
First Piper 