Fubotv earnings beat by $0.10, revenue topped estimates
On Tuesday, Citi analysts upgraded Quantasing Group Ltd (NASDAQ: QSG) stock from Neutral to Buy, setting a new price target of $9.52, up from the previous $6.10. Currently trading at $6.95 with a market capitalization of $341 million, InvestingPro analysis suggests the stock is slightly undervalued. The upgrade follows an investor meeting where Quantasing’s management provided updates that bolstered the analysts’ confidence in the company’s growth prospects.
Quantasing’s WAKUKU brand, which produces designer toys, has been experiencing demand that exceeds its production capacity, even after a significant expansion of its molding capabilities by five to six times. With an impressive gross profit margin of 84%, according to InvestingPro data, the company’s operational efficiency supports its ambitious growth plans. This robust market demand has positioned the company to become one of China’s leading intellectual property (IP) players with a target of over 1 billion RMB in collectibles revenue by the fiscal year 2027.
Citi’s revised forecasts for Quantasing reflect the anticipated impact of the designer toy segment on the company’s financial performance. The company maintains a "GREAT" financial health score of 3.56 on InvestingPro, with the stock delivering an impressive 24% return in the past week. Revenue projections have been adjusted to a decrease of 2% for FY25 but show an increase of 5% for FY26 and a significant jump of 25% for FY27. Similarly, reported net profit (NP) estimates show an increase of 1% for FY25, 19% for FY26, and 25% for FY27.
The valuation model used by Citi has shifted from a +2.5 standard deviation (STD) to a more aggressive 5x STD basis. This change results in a 12-month rolling forward price-to-sales (P/S) target multiple of 4.7x. Currently trading at a P/E ratio of just 4.9x, the stock appears attractively valued. This multiple is conservative compared to Quantasing’s designer toy peers, which trade at 11.7x forward P/S, reflecting the early-stage execution risk associated with the company.
The Citi analyst concluded that the re-rating catalyst, combined with Quantasing’s explosive growth trajectory, supports the decision to upgrade the stock. Quantasing’s success with its WAKUKU brand has been identified as a new growth engine for the company, and the analysts have incorporated this segment’s contribution into their financial models, projecting it will grow from 60 million RMB in FY25 to 550 million RMB in FY26, and then surge to 1.2 billion RMB in FY27.
In other recent news, QuantaSing Group Ltd has unveiled its unaudited financial results for the third quarter of fiscal year 2025. The disclosure, made through a filing with the U.S. Securities and Exchange Commission, provides stakeholders with a detailed overview of the company’s performance metrics for the period ending June 30, 2025. This filing is part of QuantaSing’s commitment to transparency and regulatory compliance as a foreign private issuer. In a strategic move to diversify its business portfolio, QuantaSing Group Ltd has invested in Letsvan, a company in the pop toys industry. This investment marks the company’s expansion beyond its traditional educational services, aiming to tap into the growing market for collectible toys. The report on this investment was also filed with the SEC, highlighting QuantaSing’s efforts to explore new revenue streams. Earlier, QuantaSing Group Ltd had also released its financial results for the second quarter of fiscal year 2025, maintaining its routine compliance with SEC filing requirements. These developments reflect QuantaSing’s adaptive approach and strategic direction in enhancing its business growth and portfolio.
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