Newegg (NEGG) shares closed another 6.5% up today after the hardware and consumer electronics retailer remained in focus among meme stock enthusiasts across various online platforms. 

While some traders attribute the recent explosive rally in NEGG shares to the launch of a new “Gamer Community,” in reality, it does little to improve the company’s bleak outlook. 

Nonetheless, Newegg stock has been nothing short of a life-changing investment in recent months. The retail frenzy has resulted in a nearly 3,400% increase in its price since early May. 

Newegg Stock Valuation Is Disconnected From Fundamentals

NEGG stock is a quintessential example of the disconnect between valuation and fundamentals. 

The computer hardware and consumer electronics retailer continues to wrestle with a sales decline and an EBITDA loss in 2025. Yet, it’s trading at a premium to its market peers at writing.

For reference, Newegg shares are currently trading at a price-sales (P/S) ratio of over 2,700x, according to data from Barchart. Even the AI darling, Nvidia, has that multiple pegged at 33x only.  

Therefore, without any signs of sales or margin improvement, at least in the near term, the Nasdaq-listed firm resembles more of a gamble than a sound investment for the second half of 2025. 

Insider Buying May Not Be a Positive in the Case of NEGG Shares

Investors should also note that insider Vladimir Galkin has been loading up NEGG shares since June 9. At the time, they were trading at around $10 only. 

In total, the insider has bought over 1.3 million shares of the online retailer, and, therefore, stands to earn a fortune if he were to dump his entire stake in the days ahead. 

But that would leave retail investors, especially ones who joined the party late, with potential massive losses if his sales put downward pressure on the share price. Such is the risk of engaging with meme stocks. 

Wall Street Is Not Interested in Covering Newegg Commerce

Caution is warranted in playing Newegg stock at current levels also because no Wall Street analysts currently cover NEGG, as tracked by Barchart. 

Lack of Wall Street coverage often means limited institutional interest, weak oversight, and poor transparency. Without professional scrutiny, NEGG stock faces a higher risk of hype-driven moves and potential governance issues that could go unchecked.