Benzinga - Shares of Funko Inc (NASDAQ: FNKO) have dropped more than 56% over the past six months, despite having recovered by almost 7% so far in 2023.
To achieve the consensus EBIT growth estimates of 50% CAGR from 2022 to 2026, the company would need to execute successfully "against a relatively complex set of initiatives," according to Goldman Sachs.
The Funko Analyst: Stephen Laszczyk initiated coverage of Funko with a Sell rating and a price target of $8.50.
The Funko Thesis: The consensus estimates for EBITDA seem aggressive, amid “our outlook for lower margins,” Laszczyk said in the initiation note.
Check out other analyst stock ratings.
While Funko could grow its revenues to $2 billion over time, “we believe that recent mistakes in implementing new distribution and ERP systems as well as the company’s lack of demonstrated margin-accretive growth historically lend credence to conservatism on margins,” the analyst wrote.
“Further, we see the company’s elevated exposure to the collectibles product vertical (75% of revenue from Pop!), where we expect revenue growth to revert to the mean after experiencing strong COVID demand, as a potential downside risk,” he added.
FNKO Price Action: Shares of Funko had declined by 4.30% to $11.58 at the time of publication Wednesday.
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