GameStop Stock Just Keeps Falling. Is This the End of the Turnaround Story?

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It has been nearly five years since a meme stock-fueled rally took the stock to a split-adjusted intraday high of $120.75 per share. Today, trading at around $22 per share, it is far removed from that time, and has fallen by approximately 30% in this year alone.Still, despite the performance, GameStop's financials point to a turnaround for the business. Revenue is on the rise, and profits are exploding higher. But are those positive signs enough to make the stock a reasonable buy, or should smart investors continue to stay away?Image source: Getty Images.Fundamental changes to what had been a dying business began when serial entrepreneur Ryan Cohen joined GameStop's board in January 2021. Cohen worked to build GameStop's online presence, including creating a one-stop shop for game downloads.Additionally, recognizing that more would be needed to save the company, he had the company launch an NFT marketplace (which has since shut down) and led it into collectibles and Bitcoin investments. Cohen's vision led the board to appoint him president and CEO in September 2023.In the first half of 2025, GameStop generated $1.7 billion in revenue, a 1% increase year over year. Moreover, revenue grew 22% yearly in Q2, powered by strong demand for consoles and collectibles.Consequently, during the year's first two quarters, it booked net income of $213 million -- a far better result than the $18 million loss it suffered in the year-ago period. Considering that improvement and the stock's P/E ratio of 30, GameStop seems to offer the potential for significant growth at a relatively low valuation.However, investors also have to remember that the meme stock craze left GameStop with what was once a nosebleed valuation. As a result, Cohen's efforts to revive the company have not delivered much in the way of shareholder returns. Although the stock price has risen since Cohen became CEO (including a few significant but unsustainable spikes along the way), it has underperformed the S&P 500 during that time.GME Total Return Level data by YCharts.Now, with GameStop operating a hodgepodge of different businesses, one has to question if it's a company that can be easily handed off to new leaders once Cohen departs.One might recall the case of Jack Welch, who built GE into a diversified conglomerate. After he left, it struggled for decades under the management teams that followed him. Ultimately, they decided not to keep that conglomerate intact. With such examples in mind, investors should probably be cautious about buying into GameStop's current narrative.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,825.92 +97.12 (+1.44%)Dow 3047,316.52 +329.42 (+0.70%)Nasdaq23,513.07 +508.53 (+2.21%)Russell 20002,463.72 +30.90 (+1.27%)VIX17.72 -1.36 (-7.13%)Gold4,123.00 +113.20 (+2.82%)PortfolioSign in to access your portfolioSign inTop gainersCOGT Cogent Biosciences, Inc. 34.19 +19.37 (+130.70%)NVTS Navitas Semiconductor Corporation 9.54 +1.69 (+21.62%)OPEN Opendoor Technologies Inc. 7.92 +1.36 (+20.75%)SEDG SolarEdge Technologies, Inc. 47.32 +7.31 (+18.29%)TSEM Tower Semiconductor Ltd. 97.94 +13.87 (+16.50%)Top losersSGRY Surgery Partners, Inc. 16.06 -5.44 (-25.31%)OSCR Oscar Health, Inc. 14.82 -2.90 (-16.37%)BTDR Bitdeer Technologies Group 18.49 -3.50 (-15.91%)MTSR Metsera, Inc. 70.79 -12.39 (-14.89%)MNDY monday.com Ltd. 163.25 -26.35 (-13.90%)Most activeOPEN Opendoor Technologies Inc. 7.92 +1.36 (+20.75%)PLUG Plug Power Inc. 2.6150 -0.0350 (-1.32%)NVDA NVIDIA Corporation 197.85 +9.70 (+5.15%)ONDS Ondas Holdings Inc. 6.03 +0.22 (+3.70%)PFE Pfizer Inc. 24.30 -0.14 (-0.55%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersRIVN Rivian Automotive, Inc. 16.55 +1.32 (+8.63%)GLTO Galecto, Inc. 17.00 +12.05 (+243.43%)COGT Cogent Biosciences, Inc. 34.20 +19.38 (+130.77%)XRP-USD XRP USD 2.55 +0.21 (+9.05%)MNDY monday.com Ltd. 162.89 -26.70 (-14.08%)Top economic events