On Tuesday, Stifel, a financial services firm, adjusted its price target for Funko (NASDAQ:FNKO), a pop culture consumer products company. The price target was increased to $10.50 from the previous $9.00, while the Hold rating on the stock was maintained. The firm's analyst provided insights into the company's third-quarter estimates, anticipating modest year-over-year declines.
According to the analyst's projections, Funko's adjusted EBITDA (AEBITDA) for the third quarter is expected to be around $23 million, which is a decrease of 10% compared to the same period last year. This anticipated decline also comes with a margin contraction of 20 basis points to 7.9%. Revenue is forecasted to hit $290 million, marking an 8% year-over-year reduction.
However, these figures are generally in line with the consensus and fall near the midpoint of Funko's own guidance range for the period, which is set between $21 million to $25 million for AEBITDA and $282 million to $297 million for revenue.
The provided context for these estimates includes a look back at the second quarter, where Funko indicated that approximately $9 million in revenue was recognized earlier than expected. This was due to some customers placing orders ahead of schedule, driven by concerns over rising freight costs and the availability of containers.
Despite this shift, the company expects to see some financial benefits from ongoing operational initiatives and a strategic shift towards direct-to-consumer sales, which could help offset the pulled-forward earnings.
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