Funko stock price target lowered to $2.50 from $5.50 at Goldman Sachs

Investing.com - Goldman Sachs lowered its price target on Funko (NASDAQ:FNKO) to $2.50 from $5.50 on Thursday, while maintaining a Neutral rating on the collectibles maker. The stock, currently trading at $2.92, has fallen over 20% in the past week and 78% year-to-date, according to InvestingPro data.

The firm cited Funko’s updated guidance for the second half of 2025, which came in "well below" both prior guidance and market expectations. The new outlook projects net sales to decline by high single digits in the second half compared to the same period in 2024, implying a low-teens percentage drop for the full fiscal year 2025. This aligns with InvestingPro data showing revenue already declining by 9% over the last twelve months, with analysts forecasting a 12% drop for the current year.

Funko now expects adjusted EBITDA margin in the mid-to-high single digit percentage range, which Goldman Sachs interprets as approximately 6-7% at the midpoint. This compares to prior guidance of $80-100 million in adjusted EBITDA, which had implied margins of about 8.5% at the midpoint. InvestingPro analysis shows the company operating with significant debt burden and short-term obligations exceeding liquid assets, with a concerning current ratio of 0.64.

The company anticipates fourth-quarter results will improve over the third quarter, with overall financial performance expected to strengthen in the second half of 2025 compared to the first half. This expectation is supported by resumed shipping patterns to direct import customers in the U.S. market and fully implemented price increases. For deeper insights into Funko’s financial health and detailed analysis, investors can access comprehensive Pro Research Reports available exclusively on InvestingPro, which covers over 1,400 US stocks.

Goldman Sachs reduced its outlook for Funko’s 2025 revenue, adjusted EBITDA, and adjusted EPS, primarily reflecting updated commentary regarding demand impacts from higher prices and sales disruptions related to tariffs. The firm also lowered its target EBITDA multiple to 4.0x, reflecting "greater uncertainty in the financing of the business." According to InvestingPro metrics, the company currently trades at an EV/EBITDA multiple of nearly 21x, with an overall financial health score rated as WEAK.

In other recent news, Funko, Inc. announced the appointment of Josh Simon as its new Chief Executive Officer, effective September 1, 2025. Simon, who previously held a senior leadership role at Netflix, will also join Funko’s Board of Directors. The company outlined Simon’s extensive experience, including his leadership in global consumer products and launching Netflix’s first e-commerce platform. In addition, DA Davidson has adjusted its price target for Funko to $5.00, down from $7.00, while maintaining a Buy rating. This adjustment comes after Funko’s second-quarter 2025 results, where sales exceeded expectations but earnings fell short due to tariffs and unfavorable expense comparisons. Simon will succeed Interim CEO Mike Lunsford, who will remain on the Board after the transition. Simon’s previous roles at Netflix, Nike, and The Walt Disney Company highlight his experience in the industry. These developments indicate significant changes in leadership and financial strategy for Funko.

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