What Happened?
Shares of pop culture collectibles manufacturer Funko (NASDAQ:FNKO) jumped 13.1% in the afternoon session after Goldman Sachs raised its price target on the stock, pointing to the company's improved cost management following its third-quarter financial results.
The investment bank lifted its price target to $3.50 from $2.50, citing the company's "improved cost execution" while maintaining a Neutral rating. This move came after Funko reported its third-quarter results a few days earlier. In that report, Funko's net sales were $250.9 million, down from the previous year, but its CEO stated that profitability was "well ahead of expectations." The company's ability to manage costs effectively despite sales challenges appeared to fuel investor confidence, building on the positive reaction from its earnings release.
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What Is The Market Telling Us
Funko’s shares are extremely volatile and have had 57 moves greater than 5% over the last year. But moves this big are rare even for Funko and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 9.8% on the news that the company reported third-quarter 2025 financial results that showed a significant beat on profit expectations, even as revenue came in below forecasts. Investors focused on the company's profitability, which was well ahead of what analysts had predicted. While net sales of $250.9 million fell 14.3% from the previous year and missed forecasts, the company's adjusted earnings per share of $0.06 strongly surpassed the consensus estimate of a loss. Additionally, adjusted EBITDA of $24.43 million significantly outperformed expectations by over 60%. The positive market reaction suggests that investors were encouraged by the company's better-than-expected cost management and profitability, despite the challenging sales environment.
Funko is down 72.4% since the beginning of the year, and at $3.76 per share, it is trading 74.1% below its 52-week high of $14.50 from January 2025. Investors who bought $1,000 worth of Funko’s shares 5 years ago would now be looking at an investment worth $502.58.
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