Funko Shares Rally After Q4 Print, BMO Lifts Price Target

Shares of Funko Inc. FNKO were popping Friday after the toymaker reported better-than-expected fourth-quarter results and strong guidance for the coming year on the strength of its wildly popular Pop! bobblehead-like figures.

At least one Street analyst worries that the pop culture figurines might be a fad.

Funko stock was trading higher Friday after the Everett, Washington-based company’s strong showing Thursday in which it beat the Street on revenue and profit estimates. Earnings per share were a full dime ahead of analyst expectations, coming in at 44 cents per share on an in-line revenue report of $198.2 million.

The Analyst

BMO Capital Markets analyst Gerrick Johnson maintained a Market Perform rating on Funko and boosted the price target from $12 to $20.  

The Thesis

The problem for Johnson is what he sees as a lack of diversity in product mix.

The analyst is hesitant to recommend the stock “because we believe that Pop!, which contributes about two-thirds of company sales, could be a fad."

BMO would need to see "better diversification of revenues" and a lower share price in order to turn bullish, Johnson said. 

Funko, which CNBC recently called “a cornerstone in the geek merchandise industry,” has seen strong performance from its "Fortnite"-based Pop! collectible figurines. It also makes figurines based on characters from Disney movies, the Marvel Universe, Star Wars and even pop music figures. The company’s motto is “everyone is a fan of something.”

Price Action

Funko shares were up 4.45 percent at $20.78 at the time of publication Friday. 

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