GameStop Corp (GME) is preparing to report third-quarter earnings Tuesday after the bell, and investors are trying to figure out if the company's transformation story is actually working.

The numbers Wall Street is looking for seem pretty optimistic. Analysts are forecasting revenue of $987.3 million, up from $860.3 million a year ago, with earnings per share expected to hit 20 cents compared to just 6 cents last year. If GameStop delivers a profit, it would be the sixth consecutive quarter in the black, which would be a notable shift for a company that spent years bleeding money.

The Old Business Is Still Struggling

Here's the problem: traditional software sales continue to crater, down 26.6% year-over-year. The core video game business that built GameStop isn't exactly thriving. So the big question is whether the company's aggressive diversification efforts can pick up the slack.

Two areas are getting most of the attention. First, hardware sales might get a boost from the recently launched Nintendo Switch 2. Second, and perhaps more interesting, is the collectibles segment, which is expected to show explosive growth of over 63%. That's the kind of number that suggests something real might be happening there.

Bitcoin and Viral Marketing

Then there's the cryptocurrency angle. GameStop previously disclosed Bitcoin holdings valued at $528.6 million, and investors are eager to hear if the company has doubled down on that strategy with additional investments. It's a bold move for a video game retailer, but nothing about GameStop's recent history has been conventional.

The stock saw some volatility recently when 2019 emails between "Big Short" investor Michael Burry and "Roaring Kitty" Keith Gill surfaced, but attention has shifted back to the actual business fundamentals. Traders are also curious whether the company's recent viral "Trade Anything Day" promotion actually drove meaningful foot traffic to stores.

What the Numbers Say

GameStop earns an impressive Growth score of 99.36 in market rankings, though its Momentum score sits at a dismal 17.26. That split tells you something: the company's fundamentals might be improving, but the market isn't exactly enthusiastic about the stock right now.

Shares are trading flat at $23.37, hovering near the lower end of the 52-week range of $19.93 to $35.81. That $20 level might provide support if the earnings report disappoints, but there's plenty of room to run if the company delivers strong results and convincing guidance about its pivot to crypto and collectibles.