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On Wednesday, Texas Capital Securities analysts initiated coverage on Funko (NASDAQ: FNKO) stock with a Buy rating and set a price target of $8.00. According to InvestingPro data, this target represents nearly 90% upside from the current price of $4.22. This move comes despite challenges in discretionary consumer spending and tariffs on imported goods from China, which have contributed to a roughly 70% year-to-date decline in Funko shares.
Analysts at Texas Capital Securities expressed confidence in Funko’s current valuation, suggesting it more than accounts for existing risks, while highlighting several potential growth opportunities. The stock has shown recent momentum with a 13.6% gain over the past week, though it remains significantly below its 52-week high of $14.65. They pointed to a potential rebound in Hollywood-driven box office revenues as a factor that could increase demand for new content, along with the launch of the online Pop! Yourself platform expected to enhance Funko’s market position.
Additionally, the analysts noted that Funko’s recently implemented tariff mitigation strategies could lead to improved margins and earnings as the company moves into 2026. This positive outlook is reflected in the Buy rating and the $8 price target, which suggests a potential upside of approximately 80% from current levels.
Texas Capital Securities’ analysis underscores the belief that Funko is well-positioned to navigate current market challenges and capitalize on future opportunities, despite the recent downturn in its stock price.
In other recent news, Funko Inc (NASDAQ:FNKO). reported a wider-than-expected loss for the first quarter of 2025, with earnings per share at -$0.33, missing the forecast of -$0.11. Despite the earnings miss, the company’s revenue of $190.7 million was in line with expectations, and the stock rose 5.95% in aftermarket trading. Funko’s management highlighted operational improvements, including a 20% global workforce reduction and supply chain diversification. The company also gained market share internationally, particularly in Europe, where sales outpaced the toy industry growth.
Goldman Sachs recently upgraded Funko’s stock rating from Sell to Neutral, although the firm reduced the price target to $5.50 from $7.00, citing a more balanced risk/reward outlook. DA Davidson also adjusted its price target for Funko to $7.00 from $13.00 but maintained a Buy rating, emphasizing the company’s strategies to mitigate tariff challenges. Funko has withdrawn its full-year 2025 outlook due to tariff uncertainties but remains focused on mitigating $45 million in incremental tariff costs. The company is also exploring debt refinancing options and anticipates improved performance in the second half of 2025.
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