This article first appeared on GuruFocus .
GameStop ( NYSE:GME ) attracted a new Wall Street bull Monday after StoneX initiated coverage with a Buy rating and $33 price target, citing growing confidence in the retailer's transformation.
Analyst Mike Hickey said Ryan Cohen has rebuilt GameStop's earnings base, while the company's growing collectibles business offers another leg of potential growth.
That view reflects how different GameStop looks from the struggling video-game retailer investors knew several years ago.
The company has been shrinking its traditional store base, cutting costs, and shifting toward higher-margin categories such as trading cards and collectibles.
In the second quarter, GameStop's revenue fell 18.7% year over year, but operating income jumped to $160.2 million from $66.4 million. Collectibles revenue surged 56.5% to $356.3 million, representing roughly 45% of total sales.
That mix shift is important because the legacy video-game business continues to shrink.
GameStop is increasingly trying to turn its physical stores into infrastructure for the collectibles market instead, including trading-card sales and authentication services.
The company's partnership with PSA adds another dimension. GameStop stores can serve as drop-off locations for card grading, potentially giving the retailer a recurring relationship with collectors rather than relying primarily on one-time game purchases.
StoneX is not alone in seeing value in that transformation.
Yorkville Ives has also taken a bullish view, arguing that GameStop is evolving into a leaner collectibles and capital-allocation platform rather than remaining a pure legacy retailer.
Investor Takeaway
I think the most important part of StoneX's call is that GameStop is starting to attract traditional analyst attention for something other than meme-stock volatility.
The bull case is increasingly about profitability, collectibles, and capital allocation.
That does not remove the risks.
Revenue is still shrinking, the legacy gaming business remains structurally challenged, and GameStop's growing exposure to outside investments introduces another layer of volatility.
But the business itself is clearly becoming leaner.
For investors, the key things to watch are collectibles growth, operating margins, store economics, capital allocation, and whether GameStop can keep growing earnings even if total revenue remains under pressure.
The transformation is becoming easier to see.
Now Wall Street is starting to price it in.
