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Bull Of The Day: Funko (FNKO)

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Funko (FNKO - Free Report) is a Zacks Rank #2 (Buy) and the stock has been nothing short of a runaway winner over the last few months.  In this Bull of the Day article, we will take a look at the recent move in earnings estimates, the earnings history, and the valuation.

Description

Funko is a pop culture consumer products company, designs, sources, and distributes licensed pop culture products in the United States, China, Vietnam, and the United Kingdom. The company offers vinyl, bobble head, blind-packed miniature, and action figures; and plush products, accessories, apparels, and homewares, as well as bags, purses, and wallets.  Funko, Inc. was founded in 2017 and is headquartered in Everett, Washington.

Earnings Estimates

The foundation of the Zacks Rank is the movement in earnings estimates.  When estimates are moving up, the stock gets a better Zacks Rank. We have just that happening with FNKO.

Estimates have been moving up... but other stocks have seen even greater estimates.  Those stocks are Zacks Rank #1 (Strong Buy) stocks, but with a Zacks Rank #2 (Buy) FNKO is also looking good.

THe 2018 Zacks Consensus Estimate has moved up a penny from where it was 90 days ago.  The number for 2019 is up 3 cents over the same time horizon.

Earnings History

I see only two earnings reports Zacks has data for.  There have been a total of three reports and importantly the year over year revenue rate has been higher for each report.  That fact alone tells me that the company is growing.

In the two quarters that Zacks had estimates for, I see two monster beats.  That should give investors confidence that the next report that could come in early August could be another beat.

At present, the Zacks Consensus Estimate stands at $123M in revenue and EPS of $0.02 for the Fiscal second quarter of 2018.

Valuation

FNKO sports an A for Growth and an A for Value and that isn't something that I always like to see.  I am all about growth, so I like to see a strong growth style score and a weak value score because value investors and growth investors are inherently looking for different things.  That said, a 21x forward earnings multiple is really low for a company that is seeing revenue growth north of 35% on an annual basis. The price to book of 2.4x is also well below the industry average.  Zacks doesn't have a price to sales multiple, but I calculated a 0.6x number and that is seriously low for a company showing the growth in sales and margins that FNKO is seeing.

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Funko, Inc. Price and Consensus

Funko, Inc. Price and Consensus | Funko, Inc. Quote

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