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Category: Stock Market and Funko
Date: 3 November 2019 Stock Price: $15.20 We take a look at the 3rd quarter earnings report of their 2019 fiscal year of Funko, the company that focuses on pop culture toys, action figures and related goods and accessories
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About Funko
Funko provides connection to pop culture with a lifestyle product line that includes vinyl figures, action toys, plush, apparel, board games, housewares and accessories. As the world’s largest proprietor of licenses, entertainment enthusiasts display their fandom through the lens of Funko products. The company powers the Loungefly, Funko Games and Funko Animation Studio brands, while also offering a large selection of lifestyle goods through its retail locations in Everett, Washington and Hollywood, California
Dr Strange Funko Bobble Head. Image obtained from Bigsmall.in
Financial overview of Funko 3rd quarter 2019 earnings results
The data below refers to the latest quarter's data (unless specified otherwise)
- Net sales: $223.307 million (up from $176.915 million for the same quarter of the previous year)
- Net sales increased by 26.2% over the last 12 months
- Cost of goods sold: $137.801 million (up from $109.847 million for the same quarter of the previous year)
- Cost of goods sold increased by 25.4% over the last 12 months
- Net income: $8.639 million (up from $1.57 million for the same quarter of the previous year)
- Diluted earnings per share: $0.25 (up from $0.06 for the same quarter of the previous year)
- PE ratio of Funko: 15.2
- Number of shares in issue: 34.503 million (up from 26.286 million for the same period of the previous year)
- Cash and cash equivalents: $13.492 million
- Cash and cash equivalents per share: $0.39
- Cash and cash equivalents makes up 2.6% of Funko's market capital
- Cash and cash equivalents makes up 1.7% of Funko's total assets
- Accounts receivable: $163.088 million
- Accounts receivable makes up 20.1% of Funko's total assets
- Stockholders equity in Funko: $306.588 million
- Stockholders equity per share in Funko: $8.88
- Funko is trading at 1.77 times its stockholders equity per share which is outside the expected range of between 2 and 4 that most firms tend to trade at
Funko (NASDAQ: FNKO) management commentary on 3rd quarter 2019 earnings
EVERETT, Wash. --(BUSINESS WIRE)-- Funko, Inc. (" Funko,” or the “Company”) (Nasdaq: FNKO), a leading pop culture consumer products company, today reported its consolidated financial results for the third quarter ended September 30, 2019 .
“Funko once again delivered another quarter of strong growth and financial performance,” said Brian Mariotti , Funko’s CEO. “We are driving results by executing against our strategic initiatives and investing in the long-term success of Funko . “More and more people are choosing Funko to be the platform in which they engage with pop culture. We are focused on finding new and innovative ways to connect people to their favorite entertainment through fan experiences as well as digital and physical goods.”
“There continues to be strong global demand for our products as the proliferation of content persists around the world. We are continuing to make the investments needed to capitalize on our expanding growth opportunities in both new and existing markets.”
Third Quarter 2019 Highlights
“Funko once again delivered another quarter of strong growth and financial performance,” said Brian Mariotti , Funko’s CEO. “We are driving results by executing against our strategic initiatives and investing in the long-term success of Funko . “More and more people are choosing Funko to be the platform in which they engage with pop culture. We are focused on finding new and innovative ways to connect people to their favorite entertainment through fan experiences as well as digital and physical goods.”
“There continues to be strong global demand for our products as the proliferation of content persists around the world. We are continuing to make the investments needed to capitalize on our expanding growth opportunities in both new and existing markets.”
Third Quarter 2019 Highlights
- Net sales increased 26% to $223.3 million
- Gross profit increased 26% to $85.5 million
- Gross margin decreased 10 basis points to 38.3%
- Income from operations increased 36% to $22.6 million
- Net income increased to $15.5 million from $7.6 million
- Earnings per diluted share increased to $0.25
- Adjusted Net Income was $19.9 million compared to $13.6 million in the third quarter of 2018, and Adjusted Earnings per Diluted Share 3 was $0.38 , compared to $0.27 in the third quarter of 2018
- Adjusted EBITDA 3 increased 20% to $40.6 million
2019 Outlook
The Company is reiterating its outlook for the full year 2019. The Company expects net sales to be in a range of $840 million to $850 million . Adjusted EBITDA is expected to be in a range of $140 million to $145 million . Adjusted Earnings per Diluted Share is expected to be in a range of $1.15 per share to $1.22 per share and is based on estimated adjusted average diluted shares outstanding of 53.5 million for the full year 2019.
Adjusted EBITDA and Adjusted EPS are non-GAAP measures. A table at the end of this release reconciles Funko’s outlook for the full year 2019 Adjusted EBITDA and Adjusted Earnings per Diluted Share guidance to the most directly comparable U.S. GAAP financial measures. Please refer to the “Non-GAAP Financial Measures” section of this press release.
The Company is reiterating its outlook for the full year 2019. The Company expects net sales to be in a range of $840 million to $850 million . Adjusted EBITDA is expected to be in a range of $140 million to $145 million . Adjusted Earnings per Diluted Share is expected to be in a range of $1.15 per share to $1.22 per share and is based on estimated adjusted average diluted shares outstanding of 53.5 million for the full year 2019.
Adjusted EBITDA and Adjusted EPS are non-GAAP measures. A table at the end of this release reconciles Funko’s outlook for the full year 2019 Adjusted EBITDA and Adjusted Earnings per Diluted Share guidance to the most directly comparable U.S. GAAP financial measures. Please refer to the “Non-GAAP Financial Measures” section of this press release.
Funko (NASDAQ: FNKO) stock price history
The image below obtained from Google, shows the stock price history of Funko since their listing. And its been a good time for Funko stockholders. At listing it was trading at around $7 a stock and its currently trading at $15.20 a stock. That's a very healthy return of 117.14% provided to Funko stockholders since their listing
The stock of Funko is trading at a lot closer to its 52 week low of $11.22 than it is to its 52 week high of $27.89 stock, which to us is a clear indication that the short term sentiment and momentum of Funo stock is negative at this point in time,
The stock of Funko is trading at a lot closer to its 52 week low of $11.22 than it is to its 52 week high of $27.89 stock, which to us is a clear indication that the short term sentiment and momentum of Funo stock is negative at this point in time,
Funko stock price history since its listing
Recent coverage of Funko
The extract below discusses the latest regarding Funko as obtained from TheStreet.com
LOS ANGELES, Oct. 04, 2019 (GLOBE NEWSWIRE) -- Funko, Inc. ("Funko," or the "Company") (Nasdaq:FNKO), a leading pop culture consumer products company, announced today that its new retail location in Hollywood will officially open its doors to the public on Monday, November 18, 2019. Funko plans to celebrate with a special Grand Opening event. The store will be located at 6201 Hollywood Blvd. in Los Angeles. Funko Hollywood's Grand Opening event will kick off at 10:00AM on November 18. There is no cost to enter, but entry will be subject to availability. Those interested in attending will be able to pre-register online. There will also be a standby line onsite for those who are unable to pre-register, but still hope to attend. Additional information will be announced in the coming weeks through Funko's social channels. "Our team has done a phenomenal job bringing these sets to life. We're Fto now be a permanent fixture in the Hollywood community and look forward to bringing the magic of Funko to the fans, families and entertainment aficionados," said Funko Chief Executive Officer, Brian Mariotti. As part of the Grand Opening, Funko is partnering with Alaska Airlines to offer a chance to attend the Grand Opening event. Those selected will receive airfare, accommodations, a gift card, and guaranteed entry to the Grand Opening. The Hollywood store will be the second brick-and-mortar retail location for Funko.
LOS ANGELES, Oct. 04, 2019 (GLOBE NEWSWIRE) -- Funko, Inc. ("Funko," or the "Company") (Nasdaq:FNKO), a leading pop culture consumer products company, announced today that its new retail location in Hollywood will officially open its doors to the public on Monday, November 18, 2019. Funko plans to celebrate with a special Grand Opening event. The store will be located at 6201 Hollywood Blvd. in Los Angeles. Funko Hollywood's Grand Opening event will kick off at 10:00AM on November 18. There is no cost to enter, but entry will be subject to availability. Those interested in attending will be able to pre-register online. There will also be a standby line onsite for those who are unable to pre-register, but still hope to attend. Additional information will be announced in the coming weeks through Funko's social channels. "Our team has done a phenomenal job bringing these sets to life. We're Fto now be a permanent fixture in the Hollywood community and look forward to bringing the magic of Funko to the fans, families and entertainment aficionados," said Funko Chief Executive Officer, Brian Mariotti. As part of the Grand Opening, Funko is partnering with Alaska Airlines to offer a chance to attend the Grand Opening event. Those selected will receive airfare, accommodations, a gift card, and guaranteed entry to the Grand Opening. The Hollywood store will be the second brick-and-mortar retail location for Funko.
Funko Head Office
Funko (NASDAQ: CLX) stock valuation
So what do we value Funko stock at after the release of their 3rd quarter 2019 earnings and the fiscal guidance provided? Based on Funko's earnings report and fiscal guidance provided our valuation models provides a target (full value) price for Funko at $17.90 a stock. We therefore believe that the stock of Funko is undervalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $17.90 therefore we believe a good entry point into Funko stock is at $16.10 or below. We expect the stock of Funko to kick up from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is undervalued and there is scope for stock price growth.
Since the stock of Funko is trading at well below our suggested entry point into the stock we rate the stock of Funko as a buy
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $17.90 therefore we believe a good entry point into Funko stock is at $16.10 or below. We expect the stock of Funko to kick up from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is undervalued and there is scope for stock price growth.
Since the stock of Funko is trading at well below our suggested entry point into the stock we rate the stock of Funko as a buy
Next earnings release of Funko
It is expected that Funko will publish their 4th quarter and full year earnings for their 2019 fiscal year in early February 2020