Why Kohl's Breaks the Meme Stock Mold: A Study in Misaligned Valuations

The Rise of New Meme Darlings in 2025

The meme stock phenomenon continues to evolve beyond the original wave of 2021. While AMC Entertainment and GameStop still command attention among retail traders, a fresh contender has emerged: Kohl’s (NYSE: KSS). What distinguishes this retailer’s recent trading activity is a fundamental departure from how past meme rallies played out. Unlike the classic internet-driven rallies that sent certain stocks to the moon purely on social sentiment, Kohl’s has ascended while maintaining a substantial gap between its market valuation and underlying business value.

The Short Squeeze That Wasn’t

Last summer, Kohl’s share price jumped from single digits into the mid-teens, powered by retail traders attempting to orchestrate a short squeeze similar to previous meme campaigns. The high level of short interest initially suggested potential for an explosive move. However, the social media-fueled trading community’s influence has weakened considerably since 2021. Their collective push failed to send the stock “to the moon” as hoped, yet something unexpected occurred: the shares stabilized at levels that reflect genuine business metrics rather than pure speculation.

This outcome marks a sharp contrast to earlier meme stocks, where valuations became completely untethered from fundamentals. With Kohl’s, the floor beneath the stock appears anchored to real operational performance and asset composition.

The Overlooked Asset Equation

The truly compelling aspect of Kohl’s valuation lies in its balance sheet, not its social media following. In 2022, a buyout firm valued the company at $60 per share—a premium bid that hinged heavily on the retailer’s real estate holdings. That same year, another investor group submitted a $2 billion proposal targeting exclusively the property assets.

According to Kohl’s most recent 10-K filing, the company’s owned land and buildings carry a book value of approximately $9.44 billion. This figure substantially exceeds the company’s current enterprise value (market capitalization plus net debt) by roughly $1 billion. With the current market cap sitting at just $1.76 billion, the arithmetic suggests considerable hidden wealth locked within real property.

In theory, liquidating these assets could unlock substantial returns compared to the present stock price. However, banking on asset sales as the primary catalyst for gains carries significant risk. The meme community’s failed squeeze attempt demonstrates that narrative-driven strategies often disappoint.

The Operational Turnaround: The Real Test Ahead

The actual trajectory of Kohl’s stock will likely hinge on operational execution rather than external factors. Whether the retailer can successfully navigate its transformation as a business—improving profitability, customer acquisition, and competitive positioning—will determine if the current valuation represents genuine opportunity or a value trap.

Historical precedent offers both cautionary tales and inspirational examples. When Netflix was highlighted as a top investment prospect in December 2004, a $1,000 allocation would have appreciated to $576,882 by November 2025. Similarly, Nvidia identified in April 2005 would have generated $1,119,006 from the same investment. Yet these represent exceptional cases where operational excellence delivered extraordinary returns.

The S&P 500 has posted a 190% return over comparable periods, while professional analyst services have achieved average returns exceeding 1,000%—a stark reminder that selecting the right business makes all the difference.

The Bottom Line

Kohl’s occupies a peculiar position: too fundamentally sound for the traditional meme crowd, yet dependent on uncertain operational improvements to justify current valuation. The convergence of high short interest and genuine asset value created a temporary window of retail attention, but neither meme mechanics nor real estate sales are likely to drive the next significant price movement.

The investment case for Kohl’s rests entirely on whether the company can execute a successful business turnaround. Only those genuinely confident in management’s ability to restore profitability should consider building a position at these levels.