NEW YORK — GameStop Corp. shares hovered around $25 in early trading Friday as investors weighed the company’s cash-rich balance sheet and potential strategic moves against ongoing challenges in its core retail business, leaving analysts divided on whether the meme stock favorite represents a compelling long-term opportunity or a high-risk legacy play.

The video game retailer has transformed since its 2021 meme stock frenzy, amassing nearly $9 billion in cash and equivalents while reducing debt and exploring diversification under CEO Ryan Cohen. Yet physical game sales continue declining amid digital shifts, raising questions about long-term viability even as Wall Street debates the company’s evolution into a potential holding…