Funko Inc (FNKO)

Funko Inc.: Comprehensive Overview

Company Profile:

Detailed History and Background:

Funko Inc. was founded in 1998 by Mike Becker as a small bobblehead figurine company. The company's initial focus was on creating licensed bobbleheads of pop culture icons, such as Big Boy, the mascot of Bob's Big Boy Restaurants.

In 2005, Brian Mariotti joined Funko as CEO and led the company through a period of significant growth. Mariotti expanded the product line to include vinyl figures, plush toys, and other collectibles. He also secured licensing agreements with major entertainment companies, including Disney, Marvel, and Warner Bros.

Core Business Areas:

• Design, manufacture, and distribution of licensed pop culture collectibles.
• Product categories include vinyl figures, plush toys, action figures, bobbleheads, and apparel.
• Licensing agreements with major entertainment companies, including Disney, Marvel, Warner Bros., Nickelodeon, and Hasbro.

Leadership Team and Corporate Structure:

• Chief Executive Officer: Andrew Perlmutter
• President: Brian Mariotti
• Chief Financial Officer: Jennifer Bullard
• Chief Operating Officer: Michael C. Lewis
• Head of Global Marketing: Maureen O'Connell

Top Products and Market Share:

Top Products:

• POP! Vinyl figures: These are the company's most popular product, featuring stylized vinyl figures of characters from popular movies, TV shows, video games, and comic books.
• Funkoverse Strategy Games: These are board games that feature characters from popular franchises, such as Harry Potter, Rick and Morty, and The Golden Girls.
• Loungefly bags and accessories: These are licensed bags and accessories featuring characters from popular franchises.
• Legacy Collection action figures: These are highly detailed action figures of iconic characters from movies, TV shows, and video games.

Market Share:

• Funko is the global market leader in licensed pop culture collectibles, with an estimated market share of over 40%.
• In the United States, Funko holds a market share of approximately 50%.

Product Performance and Market Reception:

Funko's products have been well-received by consumers, with the company consistently achieving high sales and strong brand recognition. The company's ability to secure licensing agreements with major entertainment companies has been a key driver of its success.

Competition:

• Hasbro (HAS)
• Mattel (MAT)
• NECA
• McFarlane Toys
• Loungefly

Total Addressable Market:

The global market for licensed pop culture collectibles is estimated to be worth over $10 billion. The US market represents the largest segment of this market, with an estimated value of over $5 billion.

Financial Performance:

Revenue and Profitability:

• Revenue in 2022: $1.37 billion
• Net income in 2022: $209 million
• Profit margin in 2022: 15.2%
• Earnings per share (EPS) in 2022: $2.57

Financial Performance Comparison:

• Revenue and net income have grown steadily over the past five years.
• Profit margin has remained relatively stable.
• EPS has increased significantly over the past five years.

Cash Flow and Balance Sheet:

• Strong cash flow from operations.
• Healthy balance sheet with low debt levels.

Dividends and Shareholder Returns:

Dividend History:

Funko does not currently pay a dividend.

Shareholder Returns:

• Total shareholder return over the past 1 year: 10.5%
• Total shareholder return over the past 5 years: 154.2%
• Total shareholder return over the past 10 years: 7,447.7%

Growth Trajectory:

Historical Growth:

• Revenue has grown at a compound annual growth rate (CAGR) of 20% over the past five years.
• Net income has grown at a CAGR of 30% over the past five years.

Future Growth Projections:

• Management expects revenue to grow in the mid-teens to low-twenties percent range in 2023.
• The company is launching new products and expanding into new markets, which is expected to drive future growth.

Market Dynamics:

Industry Trends:

• The pop culture collectibles market is expected to continue to grow in the coming years.
• The increasing popularity of streaming services and digital content is driving demand for physical collectibles.
• The rise of nostalgia and fandom is also contributing to the growth of the market.

Funko's Position:

Funko is well-positioned to benefit from these trends, given its strong brand recognition, licensing agreements, and product innovation.

Competitors:

Competitor	Stock Symbol	Market Share
Hasbro	HAS	25%
Mattel	MAT	20%
NECA	N/A	5%
McFarlane Toys	N/A	5%
Loungefly	LF	5%

Competitive Advantages:

• Strong brand recognition and licensing agreements.
• Product innovation and diversification.
• Strong distribution network.

Competitive Disadvantages:

• Reliant on intellectual property of others.
• High competition in the industry.

Recent Acquisitions:

• November 2021: Mondo: Mondo is a pop culture collectibles company known for its high-quality, limited-edition products.
• August 2021: Terrarium: Terrarium is a tabletop game company known for its innovative and engaging games.
• April 2021: Funko Games: Funko Games is a tabletop game company that Funko acquired in 2018.

AI-Based Fundamental Rating:

Rating: 8/10

Justification:

Funko has a strong financial position, a leading market share in the pop culture collectibles industry, and a track record of growth. The company is well-positioned to benefit from the continued growth of the industry and its strategic initiatives.

Sources and Disclaimers:

Sources:

• Funko Inc. website
• Yahoo Finance
• MarketWatch
• SEC filings

Disclaimers:

This information is provided for educational purposes only and should not be considered investment advice. Please consult with a financial advisor before making any investment decisions.