GameStop (NYSE:GME) has been among the most volatile stocks in the market. A high-profile meme stock, GameStop is certainly a company most fundamental investors are ignoring right now. Any stock that moves mostly on hype and to levels that aren’t rational, as GME stock has done in the past, is one most investors certainly don’t want to play around with.

I think the company’s recent volatility really hasn’t been that meaningful relative to other stocks in the market. It appears GameStop is seeing much more stable price action in large part due to a lack of ammunition from retail investors, many of whom may not have the funds to play in the meme stock world as they once did.

Yes, there were notable spikes in May that investors can’t ignore. And as far as short-squeeze plays are concerned, there’s always the potential that the Ryan Cohen and Keith Gill crowd could jump on a prospective catalyst and take this stock for a ride.

Here’s why I think that’s increasingly unlikely to be the case.

Fundamental Weakness Persists

Down considerably from its various meme stock surge peaks, GME stock appears to be settling into a sub-$10 billion valuation right now. Given the company’s recent Q1 results, in which the company reported revenue of just $882 million and a $32.3 million net loss, such a valuation still seems very bloated.

The company did end the quarter with more than $1 billion in cash (but also nearly $850 million in liabilities). Additional revenue decreases are generally expected, given the company has already closed 54 stores this years. With a forward price-earnings ratio of 260-times (and that’s assuming analysts are correct in projecting positive earnings), this is a stock that’s extremely overvalued at current levels.

The company’s net losses have narrowed somewhat, as GameStop searches for efficiency within its operating model. But news that the company abruptly halted operations at Game Informer on August 2 is just one of many negative catalysts for the company investors seemingly have yet to price in.

Roaring Kitty Loses Followers

Keith Gill, famously known as “Roaring Kitty” among his fans, is one of the most important individuals behind the previous meme surges in GME stock. The meme trader hinted at a May 12 return to the stock, showing an incredibly large position in the video game retailer, leading to the most recent surge. That surge has been short-lived, and the lack of communication from Gill in recent weeks has led him to lose followers.

Following Roaring Kitty’s return to social media and a YouTube livestream, GameStop and meme stocks soared. Gill’s X followers surged from 470,000 to 1.3 million in a week. His meme posts drove significant gains, including a 52-week high for GameStop. Gill also teased a pet stock investment, revealing a 6.6% stake in Chewy (NYSE:CHWY), which boosted its trading value.

Since Roaring Kitty’s last post on June 27, his X account has lost over 3,000 followers, declining at a rate of around 100 per day. Despite a brief surge, GameStop shares, which peaked at $64.83 on May 14, have dropped to $21.28. Investors who bought in after Gill’s return are facing losses, with the stock down 12.1% in the past month but up 21.4% year-to-date.

Ignore GME Stock Altogether

Analysts see GameStop’s new investment policy as a sign of doubt in its core business. Wedbush analyst Michael Pachter criticized the stock’s volatility and questioned Cohen’s leadership. Although GameStop’s stock surged to $48 in June due to Roaring Kitty Gill’s reappearance and a stock offering, Wedbush (among the most bullish outfits in the market) maintained a “sell” rating and lowered its price target to $11. 

In my view, there’s nothing attractive about GME stock at current levels. Fundamentally, this company shouldn’t be worth what it is. And while a hoard of investors may continue to hold this stock and “never sell,” I never say never in the stock market. This is a company that appears to be failing, and it’s most likely going to be a sinking ship over the long term.

• The meme stock rally is over, and GameStop (GME) stock appears to be out of gas.
• Any sort of rallies to the upside continue to be met by what appear to be fundamental-driven short sellers. 
• Here’s why that dynamic may not change moving forward. 

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.