What Happened?
Shares of pop culture collectibles manufacturer Funko (NASDAQ: FNKO) fell 5.3% in the morning session after investment firm DA Davidson lowered its estimates for the company, citing commentary from competitors regarding delayed retailer ordering. While investment firm DA Davidson maintained its "Buy" rating and $7.00 price target on the stock, it also lowered its financial estimates. The firm's decision came after competitor commentary suggested that retailers were delaying orders, a trend that was expected to impact Funko. This news appeared to overshadow the firm's positive view on Funko's brand strength with its core customers.
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What Is The Market Telling Us
Funko’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock gained 5% after the company's stock benefited from a broader market rally fueled by strong U.S. economic data. The positive momentum in the market came after new reports showed unexpected strength in the U.S. economy, buoying investor sentiment. Key data revealed that consumer spending at retailers was stronger than anticipated and unemployment claims fell, signaling a resilient job market. This encouraging economic picture often boosts consumer discretionary stocks like Funko, as it suggests shoppers may have more confidence and capacity to spend on non-essential items. Also, the second quarter (2025) earnings season got off to a strong start. Quarterly earnings reports released during the week exceeded Wall Street's expectations, fueling investor confidence. Around 50 S&P 500 components reported, with 88% of those exceeding analysts' expectations, FactSet data revealed.
Funko is down 71.3% since the beginning of the year, and at $3.91 per share, it is trading 73.1% 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 $708.71.
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