{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "FNKO",
  "name": "Funko, Inc.",
  "url": "https://frontierpicks.com/dossiers/FNKO/",
  "json_url": "https://frontierpicks.com/dossiers/FNKO.json",
  "status": "DORMANT",
  "current_conviction": "MEDIUM",
  "archetype": {
    "code": "a4",
    "n": 4
  },
  "current_thesis": "Funko's third-quarter report on 5 November 2026 beat guidance, with gross margin of 45.2% versus 43–44% and adjusted EBITDA of $32.1 million; the holiday quarter and a shrinking Loungefly line decide whether the margin gain lasts.",
  "invalidation_trigger": "A daily close below $6.40, under the 2026-10-28 close of $6.59 and giving back the post-report gain. A cut to the $100–110 million 2026 adjusted EBITDA outlook would also break the case.",
  "catalyst_date": "2026-11-27",
  "portfolio": null,
  "pick": null,
  "themes": [
    "consumer-discretionary-rotation"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "Funko, Inc. - Form 8-K - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001704711/000170471126000051/ex-99111526.htm",
      "date": null
    },
    {
      "title": "Funko, Inc. - Form 8-K - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001704711/000170471126000051/q32026earnings-websitepr.htm",
      "date": null
    },
    {
      "title": "Stock Titan",
      "url": "https://www.stocktitan.net/sec-filings/FNKO/8-k-funko-inc-reports-material-event-aad3c4124a90.html",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "Q3 2026 net sales $258.3M, up 3.0%; Core Collectibles $210.1M, up 4.8%; Loungefly $40.3M, down 9.8%",
      "source": "Funko Q3 2026 earnings release (8-K)",
      "as_of": "2026-11-05"
    },
    {
      "claim": "Q3 2026 gross margin 45.2% versus 40.2% a year earlier; adjusted EBITDA $32.1M versus $24.4M; net income $7.5M",
      "source": "Funko Q3 2026 earnings release (8-K)",
      "as_of": "2026-11-05"
    },
    {
      "claim": "FY2026 guidance reiterated: net sales flat to up 3%, gross margin 46–47%, adjusted EBITDA $100–110M, including the $25.4M Q2 tariff benefit",
      "source": "Funko Q3 2026 earnings release (8-K)",
      "as_of": "2026-11-05"
    },
    {
      "claim": "Total debt $195.9M and cash $41.6M at Sept 30, 2026; total debt was $225.3M at Dec 31, 2025",
      "source": "Funko Q3 2026 earnings release (8-K)",
      "as_of": "2026-09-30"
    },
    {
      "claim": "Inventory $91.6M at Sept 30, 2026 versus $99.8M at Sept 30, 2025",
      "source": "Funko Q3 2026 earnings release (8-K)",
      "as_of": "2026-09-30"
    },
    {
      "claim": "Q3 adjusted EPS $0.16 versus $0.10 estimate; sales $258.3M versus $250.7M estimate",
      "source": "Benzinga headline",
      "as_of": "2026-11-05"
    },
    {
      "claim": "Hasbro raised 2026 revenue growth outlook to 7–9% constant currency from 5–7%",
      "source": "Reuters via BNN Bloomberg",
      "as_of": "2026-10-20"
    }
  ],
  "view_changes": [
    {
      "date": "2026-11-11",
      "at": "2026-11-11T04:34:00Z",
      "from": "LOW",
      "to": "MEDIUM",
      "kind": "results",
      "fact_date": "2026-11-05",
      "fact": "Funko's Q3 2026 gross margin of 45.2% and adjusted EBITDA of $32.1M beat guidance of 43–44% and $25–30M, with full-year guidance reiterated."
    }
  ],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Consumer Cyclical",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-09-30",
      "figures": {
        "revenue": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-05",
              "restated": null,
              "value_musd": 258.3,
              "yoy_pct": 3
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-06",
              "restated": null,
              "value_musd": 207.7,
              "yoy_pct": 7.4
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-07",
              "restated": null,
              "value_musd": 200.9,
              "yoy_pct": 5.3
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-12",
              "restated": null,
              "value_musd": 273.1,
              "yoy_pct": -7
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-06",
              "restated": null,
              "value_musd": 250.9,
              "yoy_pct": -14.3
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-07",
              "restated": null,
              "value_musd": 193.5,
              "yoy_pct": -21.9
            }
          ]
        },
        "gross_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-05",
              "restated": null,
              "pct": 45.2
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-06",
              "restated": null,
              "pct": 56.6
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-07",
              "restated": null,
              "pct": 44.2
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-12",
              "restated": null,
              "pct": 40.9
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-06",
              "restated": null,
              "pct": 40.2
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-07",
              "restated": null,
              "pct": 32.1
            }
          ]
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-05",
              "restated": null,
              "pct": 5.8
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-06",
              "restated": null,
              "pct": 10.7
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-07",
              "restated": null,
              "pct": -4.8
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-12",
              "restated": null,
              "pct": 2.2
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-06",
              "restated": null,
              "pct": 2.6
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-07",
              "restated": null,
              "pct": -18
            }
          ]
        },
        "pretax_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 8.8
        },
        "net_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "four_quarters_end": "2026-09-30",
          "value_musd": 7.5,
          "four_quarters_musd": 4.6
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "first_end": "2025-12-31",
          "value_musd": 82.3
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "first_end": "2025-12-31",
          "value_musd": 33.7
        },
        "free_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "first_end": "2025-12-31",
          "value_musd": 48.6
        },
        "diluted_share_change": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "base_end": "2025-09-30",
          "pct": 6.2
        },
        "cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 41.6
        },
        "debt": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 71.6,
          "composition": "long-term debt"
        },
        "net_cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": -30
        },
        "deferred_revenue": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 16.1,
          "yoy_pct": -27.5
        },
        "backlog": {
          "status": "not reported"
        },
        "receivables": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 132
        },
        "inventory": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 91.6
        },
        "equity": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-05",
          "value_musd": 197.7
        },
        "market_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-11-05",
          "value_musd": 401.5
        },
        "enterprise_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-11-05",
          "value_musd": 431.5
        },
        "ev_sales": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-11-05",
          "multiple": 0.5
        },
        "ev_ebit": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-11-05",
          "multiple": 12.9
        },
        "pe": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-11-05",
          "multiple": 87.1
        },
        "pb": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-11-05",
          "multiple": 2
        },
        "fcf_yield": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-11-05",
          "pct": 12.1
        }
      }
    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": 12.49,
      "days_to_cover": 8.3,
      "change_pct": -5
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 499995.2,
          "sold_usd": 1362804.74,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
        {
          "days": 365,
          "status": "ok",
          "from": "2025-11-16",
          "bought_usd": 499995.2,
          "sold_usd": 1896966,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        }
      ]
    }
  },
  "body_markdown": "## Current Thesis\n\nFunko's third-quarter report on 2026-11-05 answered the open question: gross margin held above guidance without the tariff one-off, and the shares sit at a 52-week high of $7.24 (close of 2026-11-10). The next test is the holiday quarter, because full-year guidance was only reiterated and Loungefly, the bags and accessories line, is shrinking.\n\nFunko reported third-quarter net sales of $258.3 million, up 3.0%, with gross margin of 45.2% against guidance of 43–44% and 40.2% a year earlier, according to its 8-K. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation, adjusted for one-offs) was $32.1 million against guidance of $25–30 million. Adjusted earnings per share were $0.16 versus a $0.10 estimate, per Benzinga.\n\nThe company kept 2026 guidance unchanged: net sales flat to up 3%, gross margin 46–47% and adjusted EBITDA $100–110 million. That range still includes the $25.4 million one-time tariff benefit booked in the second quarter. Benzinga's headline put the consensus sales estimate at $936.9 million, above the top of Funko's $908.2–935.5 million range.\n\nThe story is well known: the turnaround numbers have been public since the 2026-08-06 second-quarter report, the third quarter confirmed them on 2026-11-05, and the shares closed at $7.24 on 2026-11-10 after trading at $6.59 on 2026-10-28.\n\n## Bull Case\n\n- **Margin beat guidance without the tariff credit.** Third-quarter gross margin was 45.2% versus guidance of 43–44%, and adjusted EBITDA of $32.1 million topped the $25–30 million range (Funko 8-K, 2026-11-05). Funko credited lower freight costs and favourable reserve adjustments, according to its third-quarter presentation.\n- **Core Collectibles is still growing.** Core Collectibles sales rose 4.8% to $210.1 million in the third quarter, and the \"Other\" category rose 37.0% to $8.0 million (Funko 8-K, 2026-11-05).\n- **Debt keeps falling.** Total debt was $195.9 million at 2026-09-30, from $201.1 million at 2026-06-30 and $225.3 million at 2025-12-31. Cash was $41.6 million (Funko 8-K).\n- **Inventory is lower than a year ago.** Inventory was $91.6 million at 2026-09-30 versus $99.8 million at 2025-09-30, ahead of the holiday quarter.\n- **Net income turned up.** Third-quarter net income was $7.5 million ($0.13 per diluted share) versus $0.9 million ($0.02) a year earlier.\n\n## Bear Case\n\n- **Full-year guidance was not raised after a beat.** Funko reiterated flat-to-up-3% sales and $100–110 million adjusted EBITDA on 2026-11-05. Benzinga's headline shows the consensus sales estimate of $936.9 million above the top of the guided range.\n- **Loungefly is declining faster.** Loungefly sales fell 9.8% to $40.3 million in the third quarter, after a 1.7% decline in the second (Funko 8-K). Management is cutting the number of Loungefly products to concentrate on stronger sellers.\n- **Profit guidance still contains a one-off.** The $25.4 million tariff benefit from the second quarter is included in the 2026 gross margin and adjusted EBITDA guidance (Funko 8-K, 2026-11-05).\n- **The shares are at the analyst consensus.** The shares closed at $7.24 on 2026-11-10; the average analyst target was $7.25 as of 2026-10-16 (StockAnalysis). Goldman Sachs adjusted its target on 2026-11-10 (headline only; the figure is not confirmed here).\n- **Mattel takeover talk has gone quiet.** The Wall Street Journal reported Authentic Brands interest in Mattel on 2026-10-01, and no bid has been confirmed since.\n\n## Setup & Price Structure\n\nThe shares closed at $7.24 on 2026-11-10, equal to the 52-week high, on adjusted daily closes. They are up 21.1% over three months, and the 14-day relative strength index (RSI) is 55.7, which is not stretched. The close on 2026-10-28 was $6.59.\n\nThe earnings date is behind the shares, so no report sits inside the next 30 days. The company's next scheduled disclosure is the fourth-quarter report, expected after the window. The $7.24 high and the $6.59 pre-report close mark the near-term range.\n\nCrowding evidence is limited. The RSI is mid-range, and no SEC Form 4 insider-sale or share-issuance filing appears in company news for the period. Analyst coverage is thin, with Seaport Global at Buy with an $8 target (2026-08-24), D.A. Davidson at Buy with an $8 target (2026-08-07) and Goldman Sachs at Hold with a $6.75 target (2026-08-10), per StockAnalysis.\n\n## Catalyst Calendar\n\n- **2026-11-27:** Black Friday, start of peak holiday toy and collectibles shopping. Retailer and sell-through commentary is the nearest read on the holiday quarter, which carries most of Funko's seasonal orders.\n- **~2027-02-26 (est.):** Fourth-quarter and full-year 2026 results (date not announced by Funko). Settles whether the $100–110M adjusted EBITDA outlook is met and whether the margin gain holds.\n\n## What Would Change Our Mind\n\nA daily close below $6.40, under the 2026-10-28 close of $6.59 and giving back the post-report gain. A cut to the $100–110 million 2026 adjusted EBITDA outlook would also break the case.\n\nThe risks this note tracks, each with what would confirm it:\n\n- Holiday-quarter margin falls short of the 46–47% full-year gross margin guidance once the one-time tariff benefit is excluded. Confirmed by: Fourth-quarter gross margin or a full-year adjusted EBITDA result below $100M at the fourth-quarter report.\n- Loungefly's decline deepens and drags on total sales. Confirmed by: Loungefly sales falling more than the 9.8% of the third quarter, or net sales below the flat-to-up-3% range.\n- Shares already sit near the analyst consensus target, leaving little room if momentum slows. Confirmed by: Analyst targets clustering near $7.25 and a daily close back below $6.59.\n- Debt reduction stalls and keeps a discount on the shares. Confirmed by: Total debt above $201.1M in a future quarterly report.\n\n## Correlation Notes\n\nFunko trades with consumer discretionary and toy names. Hasbro raised its 2026 revenue outlook to 7–9% constant currency on 2026-10-20, per Reuters via BNN Bloomberg, and Mattel's takeover interest from Authentic Brands (Wall Street Journal, 2026-10-01) lifted the group. Hasbro's raise came mainly from Magic: The Gathering and digital games, so its results track Funko less closely than the headline suggests. Funko's sales are heavily weighted to the fourth quarter, so holiday retail data moves the shares more than the other quarters do.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-11T04:34:13+00:00",
  "last_synthesized": "2026-11-11",
  "date_modified": "2026-11-11",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}