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Funko, Inc. (FNKO - Free Report) was considered a "fad" when it went IPO in 2017. But this Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in both 2018 and 2019.
Funko makes pop culture consumer products, including vinyl figures, action toys, plush, apparel, housewares and accessories for consumers who have favorite pop culture brands and characters. This includes movie, television and book characters, and sports figures, including popular coaches.
Third Quarter Sales up 24%
On Nov 8, Funko reported its third quarter results and beat the Zacks Consensus Estimate by 4 cents. Earnings were $0.27 versus the consensus of $0.23.
This was the fourth beat in a row. It hasn't missed on earnings since its 2017 IPO.
Sales rose 24% to $176.9 million as the company's portfolio, and new product launches, expanded. The number of active properties increased 38% to 553 from 400 in the quarter.
“Our strong portfolio of properties and products, and our growing network of retail partners allowed us to achieve very strong third quarter growth in sales,” said Brian Mariotti, Funko’s CEO.
“We have delivered great results in every quarter since our IPO last year, despite a retail landscape that companies in the toy industry have described as challenging.”
Raised Full Year Guidance
The company was bullish and raised full year 2018 guidance.
It expects full year sales in the range of $645 million to $650 million, up from $620 to $630 million in its prior Aug 9, 2018 guidance.
Earnings are expected in the range of $0.68 to $0.73, up from the prior range of $0.60 to $0.70.
The Zacks Consensus is currently at the mid-point of the range, calling for $0.71.
That's earnings growth of 92% as Funko made $0.37 in 2017.
Analysts expect the earnings growth to continue into 2019 as 1 estimate has been revised higher in the last month pushing the Zacks Consensus Estimate for 2019 up to $0.95 from $0.91 in the last 90 days.
That's earnings growth of another 33%.
Shares Spike in 2018 on Fortnite
It's been a wild ride since the IPO.
There was a bit of a Fortnite mania in 2018 because the company was coming out with a holiday toy line based on the popular video game. Even though the company tried to temper expectations, shares spiked.
They ultimately pulled back in December 2018 which created a buying opportunity.
Even though they've rebounded, Funko still has an attractive PE of just 16.9. Given its expected growth, it has a PEG ratio of just 0.8. That's a cheap PEG for a company exhibiting this kind of growth.
Funko won't report fourth quarter results until March 2019.
For investors looking for a trendy consumer brand, Funko is one to keep on the short list.
[In full disclosure, the author of this article owns shares of FNKO in her own personal portfolio.]
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Bull of the Day: Funko (FNKO)
Funko, Inc. (FNKO - Free Report) was considered a "fad" when it went IPO in 2017. But this Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in both 2018 and 2019.
Funko makes pop culture consumer products, including vinyl figures, action toys, plush, apparel, housewares and accessories for consumers who have favorite pop culture brands and characters. This includes movie, television and book characters, and sports figures, including popular coaches.
Third Quarter Sales up 24%
On Nov 8, Funko reported its third quarter results and beat the Zacks Consensus Estimate by 4 cents. Earnings were $0.27 versus the consensus of $0.23.
This was the fourth beat in a row. It hasn't missed on earnings since its 2017 IPO.
Sales rose 24% to $176.9 million as the company's portfolio, and new product launches, expanded. The number of active properties increased 38% to 553 from 400 in the quarter.
“Our strong portfolio of properties and products, and our growing network of retail partners allowed us to achieve very strong third quarter growth in sales,” said Brian Mariotti, Funko’s CEO.
“We have delivered great results in every quarter since our IPO last year, despite a retail landscape that companies in the toy industry have described as challenging.”
Raised Full Year Guidance
The company was bullish and raised full year 2018 guidance.
It expects full year sales in the range of $645 million to $650 million, up from $620 to $630 million in its prior Aug 9, 2018 guidance.
Earnings are expected in the range of $0.68 to $0.73, up from the prior range of $0.60 to $0.70.
The Zacks Consensus is currently at the mid-point of the range, calling for $0.71.
That's earnings growth of 92% as Funko made $0.37 in 2017.
Analysts expect the earnings growth to continue into 2019 as 1 estimate has been revised higher in the last month pushing the Zacks Consensus Estimate for 2019 up to $0.95 from $0.91 in the last 90 days.
That's earnings growth of another 33%.
Shares Spike in 2018 on Fortnite
It's been a wild ride since the IPO.
There was a bit of a Fortnite mania in 2018 because the company was coming out with a holiday toy line based on the popular video game. Even though the company tried to temper expectations, shares spiked.
They ultimately pulled back in December 2018 which created a buying opportunity.
Even though they've rebounded, Funko still has an attractive PE of just 16.9. Given its expected growth, it has a PEG ratio of just 0.8. That's a cheap PEG for a company exhibiting this kind of growth.
Funko won't report fourth quarter results until March 2019.
For investors looking for a trendy consumer brand, Funko is one to keep on the short list.
[In full disclosure, the author of this article owns shares of FNKO in her own personal portfolio.]
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>