Monday - Analysts at B.Riley have increased the price target for Funko (NASDAQ:FNKO) shares to $13.00, up from the previous $12.00, while maintaining a Buy rating on the stock.
This adjustment follows a meeting with Funko's newly appointed CEO, Cynthia Williams, and a tour of the company's retail store in Hollywood, California last Thursday.
The visit provided insights into the strategic direction Williams might take the company, leveraging her experience from her previous roles at Hasbro (NASDAQ:HAS), Microsoft (NASDAQ:MSFT) Xbox, and Amazon (NASDAQ:AMZN).
The analyst noted that despite Williams' recent appointment on May 20, her initial impressions and the strategic thoughts already in place prior to her official start as CEO were compelling.
Williams' resignation from Hasbro on April 17 was mentioned as a preparatory step for her new role at Funko. The analyst expressed confidence in Williams' ability to drive sales growth and margin expansion for Funko in the coming years.
The report highlighted that Funko's stock has seen a significant increase of approximately 67% in the past two months since coverage began, outperforming the Russell 2000's decline of around 3%. The analyst's positive outlook remains unchanged and is further reinforced by Williams joining the team.
B.Riley's projection for Funko's shares anticipates a potential rise above $20 by 2026. In the interim, the slight increase in the price target to $13 is supported by a modest raise in the target multiple based on the firm's unchanged 2025 AEBITDA estimate.
InvestingPro Insights
In light of B.Riley's recent price target increase for Funko (NASDAQ:FNKO), current InvestingPro data provides additional context for investors considering the stock. Funko's market capitalization stands at $495.57 million, reflecting the company's size in the market. Despite the challenges, analysts have revised their earnings upwards for the upcoming period, indicating potential optimism about the company's future performance. This optimism is also mirrored in the stock's substantial price returns over the last month (31.76%) and three months (38.48%).
However, it's important to note that the company's P/E ratio is currently negative at -3.72, suggesting that investors are dealing with losses relative to the company's earnings. Additionally, one of the InvestingPro Tips points out that Funko is not expected to be profitable this year and was not profitable over the last twelve months. While the strong recent returns may catch the eye of some investors, the overbought status suggested by the RSI and the fact that short-term obligations exceed liquid assets are important considerations for a more cautious approach.
For those interested in a deeper analysis, InvestingPro offers additional tips on Funko. By using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to comprehensive metrics and insights to better inform their investment decisions. With the next earnings date set for August 1, 2024, staying informed with the latest data and expert analysis from InvestingPro could be crucial for investors looking to capitalize on the stock's future movements.
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