Is GME a good stock to buy? We came across a bullish thesis on GameStop Corp. on Value Don’t Lie’s Substack. In this article, we will summarize the bulls’ thesis on GME. GameStop Corp.’s share was trading at $22.26 as of June 8th. GME’s trailing P/E was 16.27 according to Yahoo Finance.
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GameStop Corp., a specialty retailer, provides games, collectibles, and entertainment products through its stores and e-commerce platforms in United States and internationally. GME has emerged from the meme-stock era as a dramatically different company under CEO Ryan Cohen, with the business now approaching its first profitable year since 2018 while sitting on more than $9 billion of cash and securities that could fund a transformational acquisition.
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Since becoming Chairman in 2021 and CEO in late 2023, Cohen has aggressively streamlined operations by accelerating store closures, reducing SG&A expenses, improving gross margins through a higher mix of collectibles, and capitalizing on a favorable lease structure that allowed the company to exit underperforming locations quickly. GameStop’s store base has declined from more than 7,000 locations at its peak to roughly 3,200 stores globally, but profitability has improved substantially despite falling revenue.
Gross margins expanded from 23% to 32% as collectibles surpassed 30% of sales, while operating expenses declined sharply, helping the retail business generate meaningful EBIT again. The company also benefits from substantial interest income generated by its cash pile, creating combined pre-tax earnings power that looks materially stronger than recent years suggest. However, the primary investment thesis centers on Cohen’s capital allocation strategy rather than the legacy retail business itself.
In January 2026, GameStop approved a significant long-term incentive package tied directly to market capitalization and EBITDA growth, aligning Cohen with shareholders while signaling confidence in a major strategic shift. Cohen has also openly discussed pursuing a large, durable, cash-flowing consumer acquisition, creating substantial optionality for investors if GameStop successfully deploys its balance sheet into a higher-quality growth business, positioning the stock as a potentially high-risk, high-reward opportunity for investors willing to underwrite execution uncertainty.
Previously, we covered a bullish thesis on DICK’S Sporting Goods, Inc. (DKS) by BotMissile in May 2025, which highlighted the company’s attractive valuation, strong free cash flow generation, and strategic upside from the Foot Locker acquisition. DKS’s stock price has appreciated by approximately 19.17% since our coverage. Value Don’t Lie shares a similar view on retail transformation opportunities but emphasizes GME’s improving profitability and acquisition optionality under Ryan Cohen’s leadership.
GameStop Corp. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held GME at the end of the first quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of GME as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GME and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
