Funko (FNKO) is best known for its POP! series of figurines — four-inch-tall plastic models with large heads and big eyes, explains Mike Cintolo, editor of Cabot Top Ten Trader.
These figurines are caricatures of fictional figures like Darth Vader and Doctor Strange and of real people too, including Machine Gun Kelly and Jordan Peele.
With 900 licensed lines including Disney (DIS), major sports leagues, video game publishers and global movie studios, Funko has something to appeal to seemingly anyone. It’s also not terribly reliant on any one licensee, with none accounting for over 6% of sales. Business took off during the pandemic and continues to be very strong.
In the first quarter, sales rose 63% while earnings per share beat consensus handily and rose 42%. The runway for growth continues to look good — with three-fourths of sales coming in the U.S., Funko has a lot of opportunity to sell more abroad.
And now that digital products, like NFTs, are considered collectibles and Funko is pushing into licensed consumer products like backpacks and clothing, it has the positioning to meet managements goal of double digit annual sales growth the next three years. Analysts see earnings surging 34% this year.
On May 5, an investor consortium led by The Chernin Group, and including eBay (EBAY) and Bob Iger — former CEO of Disney — bought 25% of Funko from ACON, the firm that bought collectibles maker Funko in 2015 and took it public two years later.
As part of the deal, eBay will be the preferred secondary market for Funkos and get exclusive releases; Chernin, which has stakes in The Athletic and Barstool Sports, should also boost Funko’s sports offerings.
Technically, FNKO topped in May of last year, corrected sharply into July and eventually slid to $16 near Halloween. But that was basically the low, with multiple retests of that level bringing support.
And then, FNKO had a nice boost on the Chernin news, though there’s been plenty of wild action since. Volatility is huge, but you could nibble here if you want to grab some.
