Intrinsic value of Funko Cl A - FNKO

Previous Close

$7.08

  Intrinsic Value

$16.04

stock screener

  Rating & Target

str. buy

+126%

Previous close

$7.08

 
Intrinsic value

$16.04

 
Up/down potential

+126%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of FNKO stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  55.84
  21.20
  19.58
  18.12
  16.81
  15.63
  14.57
  13.61
  12.75
  11.97
  11.28
  10.65
  10.08
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
Revenue, $m
  427
  518
  619
  731
  854
  987
  1,131
  1,285
  1,449
  1,622
  1,805
  1,998
  2,199
  2,410
  2,629
  2,858
  3,096
  3,344
  3,602
  3,869
  4,148
  4,437
  4,737
  5,050
  5,375
  5,713
  6,065
  6,432
  6,814
  7,212
  7,628
Variable operating expenses, $m
 
  424
  506
  595
  694
  801
  916
  1,039
  1,171
  1,310
  1,456
  1,601
  1,762
  1,931
  2,107
  2,290
  2,481
  2,680
  2,886
  3,101
  3,323
  3,555
  3,796
  4,046
  4,307
  4,578
  4,860
  5,153
  5,460
  5,779
  6,112
Fixed operating expenses, $m
 
  33
  34
  34
  35
  36
  37
  38
  39
  40
  41
  42
  43
  44
  45
  46
  48
  49
  50
  51
  52
  54
  55
  56
  58
  59
  61
  62
  64
  65
  67
Total operating expenses, $m
  383
  457
  540
  629
  729
  837
  953
  1,077
  1,210
  1,350
  1,497
  1,643
  1,805
  1,975
  2,152
  2,336
  2,529
  2,729
  2,936
  3,152
  3,375
  3,609
  3,851
  4,102
  4,365
  4,637
  4,921
  5,215
  5,524
  5,844
  6,179
Operating income, $m
  44
  60
  80
  101
  125
  150
  178
  208
  239
  273
  308
  355
  394
  435
  477
  522
  568
  616
  666
  718
  772
  828
  886
  947
  1,010
  1,076
  1,144
  1,216
  1,290
  1,368
  1,449
EBITDA, $m
  68
  92
  115
  141
  170
  201
  235
  271
  309
  350
  393
  438
  485
  535
  586
  640
  696
  755
  815
  878
  944
  1,012
  1,083
  1,157
  1,233
  1,313
  1,396
  1,483
  1,573
  1,667
  1,765
Interest expense (income), $m
  12
  13
  17
  21
  26
  32
  37
  44
  50
  57
  65
  73
  81
  90
  99
  109
  119
  129
  140
  151
  162
  174
  187
  200
  214
  228
  242
  258
  273
  290
  307
Earnings before tax, $m
  27
  47
  63
  80
  98
  119
  141
  164
  189
  215
  243
  282
  313
  345
  378
  413
  449
  487
  526
  567
  609
  653
  699
  747
  797
  848
  902
  958
  1,017
  1,078
  1,141
Tax expense, $m
  0
  13
  17
  22
  27
  32
  38
  44
  51
  58
  66
  76
  84
  93
  102
  112
  121
  131
  142
  153
  165
  176
  189
  202
  215
  229
  244
  259
  274
  291
  308
Net income, $m
  27
  34
  46
  58
  72
  87
  103
  120
  138
  157
  177
  206
  228
  252
  276
  302
  328
  356
  384
  414
  445
  477
  510
  545
  582
  619
  659
  699
  742
  787
  833

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  6
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  522
  625
  747
  883
  1,031
  1,192
  1,366
  1,552
  1,750
  1,959
  2,180
  2,413
  2,656
  2,910
  3,175
  3,452
  3,740
  4,039
  4,350
  4,673
  5,009
  5,358
  5,721
  6,099
  6,491
  6,899
  7,325
  7,768
  8,229
  8,710
  9,212
Adjusted assets (=assets-cash), $m
  516
  625
  747
  883
  1,031
  1,192
  1,366
  1,552
  1,750
  1,959
  2,180
  2,413
  2,656
  2,910
  3,175
  3,452
  3,740
  4,039
  4,350
  4,673
  5,009
  5,358
  5,721
  6,099
  6,491
  6,899
  7,325
  7,768
  8,229
  8,710
  9,212
Revenue / Adjusted assets
  0.828
  0.829
  0.829
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
  0.828
Average production assets, $m
  271
  329
  393
  464
  542
  627
  718
  816
  920
  1,030
  1,146
  1,268
  1,396
  1,530
  1,670
  1,815
  1,966
  2,124
  2,287
  2,457
  2,634
  2,817
  3,008
  3,206
  3,413
  3,628
  3,851
  4,084
  4,327
  4,580
  4,844
Working capital, $m
  54
  75
  90
  106
  124
  143
  164
  186
  210
  235
  262
  290
  319
  349
  381
  414
  449
  485
  522
  561
  601
  643
  687
  732
  779
  828
  879
  933
  988
  1,046
  1,106
Total debt, $m
  218
  275
  346
  424
  510
  603
  704
  812
  926
  1,048
  1,175
  1,310
  1,451
  1,598
  1,752
  1,912
  2,078
  2,252
  2,432
  2,619
  2,813
  3,015
  3,226
  3,444
  3,671
  3,908
  4,154
  4,410
  4,678
  4,956
  5,247
Total liabilities, $m
  305
  362
  433
  511
  597
  690
  791
  899
  1,013
  1,135
  1,262
  1,397
  1,538
  1,685
  1,839
  1,999
  2,165
  2,339
  2,519
  2,706
  2,900
  3,102
  3,313
  3,531
  3,758
  3,995
  4,241
  4,497
  4,765
  5,043
  5,334
Total equity, $m
  217
  263
  315
  372
  434
  502
  575
  653
  737
  825
  918
  1,016
  1,118
  1,225
  1,337
  1,453
  1,574
  1,700
  1,831
  1,967
  2,109
  2,256
  2,409
  2,567
  2,733
  2,905
  3,084
  3,270
  3,464
  3,667
  3,878
Total liabilities and equity, $m
  522
  625
  748
  883
  1,031
  1,192
  1,366
  1,552
  1,750
  1,960
  2,180
  2,413
  2,656
  2,910
  3,176
  3,452
  3,739
  4,039
  4,350
  4,673
  5,009
  5,358
  5,722
  6,098
  6,491
  6,900
  7,325
  7,767
  8,229
  8,710
  9,212
Debt-to-equity ratio
  1.005
  1.040
  1.100
  1.140
  1.170
  1.200
  1.220
  1.240
  1.260
  1.270
  1.280
  1.290
  1.300
  1.300
  1.310
  1.320
  1.320
  1.320
  1.330
  1.330
  1.330
  1.340
  1.340
  1.340
  1.340
  1.350
  1.350
  1.350
  1.350
  1.350
  1.350
Adjusted equity ratio
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  27
  34
  46
  58
  72
  87
  103
  120
  138
  157
  177
  206
  228
  252
  276
  302
  328
  356
  384
  414
  445
  477
  510
  545
  582
  619
  659
  699
  742
  787
  833
Depreciation, amort., depletion, $m
  24
  31
  35
  40
  45
  51
  57
  63
  70
  77
  85
  83
  91
  100
  109
  119
  129
  139
  149
  161
  172
  184
  197
  210
  223
  237
  252
  267
  283
  299
  317
Funds from operations, $m
  39
  66
  81
  98
  117
  137
  159
  183
  208
  234
  262
  289
  320
  352
  385
  420
  456
  494
  534
  575
  617
  661
  707
  755
  805
  856
  910
  966
  1,025
  1,086
  1,150
Change in working capital, $m
  -10
  13
  15
  16
  18
  19
  21
  22
  24
  25
  27
  28
  29
  31
  32
  33
  35
  36
  37
  39
  40
  42
  44
  45
  47
  49
  51
  53
  55
  58
  60
Cash from operations, $m
  49
  53
  66
  82
  99
  118
  138
  160
  184
  209
  236
  261
  290
  321
  353
  387
  422
  458
  496
  536
  577
  619
  664
  710
  757
  807
  859
  913
  970
  1,028
  1,090
Maintenance CAPEX, $m
  0
  -18
  -21
  -26
  -30
  -35
  -41
  -47
  -53
  -60
  -67
  -75
  -83
  -91
  -100
  -109
  -119
  -129
  -139
  -149
  -161
  -172
  -184
  -197
  -210
  -223
  -237
  -252
  -267
  -283
  -299
New CAPEX, $m
  -21
  -58
  -64
  -71
  -78
  -85
  -91
  -98
  -104
  -110
  -116
  -122
  -128
  -134
  -140
  -145
  -151
  -157
  -164
  -170
  -177
  -184
  -191
  -198
  -206
  -215
  -224
  -233
  -243
  -253
  -264
Cash from investing activities, $m
  -22
  -76
  -85
  -97
  -108
  -120
  -132
  -145
  -157
  -170
  -183
  -197
  -211
  -225
  -240
  -254
  -270
  -286
  -303
  -319
  -338
  -356
  -375
  -395
  -416
  -438
  -461
  -485
  -510
  -536
  -563
Free cash flow, $m
  27
  -23
  -19
  -15
  -9
  -2
  6
  16
  27
  39
  52
  64
  80
  96
  114
  132
  152
  173
  194
  216
  239
  264
  289
  315
  342
  369
  399
  429
  460
  492
  526
Issuance/(repayment) of debt, $m
  47
  63
  71
  78
  86
  93
  101
  108
  115
  121
  128
  134
  141
  147
  154
  160
  167
  173
  180
  187
  195
  202
  210
  218
  227
  236
  246
  256
  267
  279
  291
Issuance/(repurchase) of shares, $m
  0
  12
  6
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -46
  75
  77
  78
  86
  93
  101
  108
  115
  121
  128
  134
  141
  147
  154
  160
  167
  173
  180
  187
  195
  202
  210
  218
  227
  236
  246
  256
  267
  279
  291
Total cash flow (excl. dividends), $m
  -18
  52
  57
  63
  77
  91
  107
  123
  141
  160
  180
  198
  220
  243
  267
  293
  319
  346
  374
  403
  434
  466
  499
  533
  569
  606
  645
  685
  727
  771
  817
Retained Cash Flow (-), $m
  27
  -46
  -52
  -57
  -62
  -68
  -73
  -78
  -83
  -88
  -93
  -98
  -102
  -107
  -112
  -116
  -121
  -126
  -131
  -136
  -141
  -147
  -153
  -159
  -165
  -172
  -179
  -186
  -194
  -203
  -211
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  6
  6
  6
  14
  23
  34
  45
  58
  72
  87
  101
  118
  136
  156
  176
  198
  220
  243
  267
  293
  319
  346
  374
  404
  434
  466
  499
  533
  568
  606
Discount rate, %
 
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
 
  5
  5
  5
  10
  15
  20
  23
  26
  29
  30
  29
  29
  27
  26
  23
  21
  18
  15
  12
  10
  8
  6
  4
  3
  2
  1
  1
  1
  0
  0
Current shareholders' claim on cash, %
  100
  93.3
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6
  90.6

Funko, Inc. is a pop culture consumer products company. The Company is engaged in selling a broad range of pop culture consumer products, featuring characters from a range of media and entertainment content, including movies, TV shows, video games, music and sports. Its products combine its proprietary brands and designs into properties it licenses from content providers. Its product categories include figures, plush, accessories and other. It also offers different types of bags and wallets. It offers its products under various brands, including Pop!, Mystery Minis, Dorbz, Pint Size Heroes, Rock Candy, Galactic or Hero Plushies, SuperCute, MyMoji and Loungefly. The Company has licensed properties into four categories: classic evergreen, movie release, current TV and current video game.


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FINANCIAL RATIOS  of  Funko Cl A (FNKO)

Valuation Ratios
P/E Ratio 12.1
Price to Sales 0.8
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 6.7
Price to Free Cash Flow 11.7
Growth Rates
Sales Growth Rate 55.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 75%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 94%
Total Debt to Equity 100.5%
Interest Coverage 3
Management Effectiveness
Return On Assets 7.6%
Ret/ On Assets - 3 Yr. Avg. 4.5%
Return On Total Capital 6.4%
Ret/ On T. Cap. - 3 Yr. Avg. 4.1%
Return On Equity 11.7%
Return On Equity - 3 Yr. Avg. 7.2%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 34.2%
Gross Margin - 3 Yr. Avg. 23.3%
EBITDA Margin 14.8%
EBITDA Margin - 3 Yr. Avg. 7.8%
Operating Margin 10.3%
Oper. Margin - 3 Yr. Avg. 5.5%
Pre-Tax Margin 6.3%
Pre-Tax Margin - 3 Yr. Avg. 3.6%
Net Profit Margin 6.3%
Net Profit Margin - 3 Yr. Avg. 3.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

FNKO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FNKO stock intrinsic value calculation we used $427 million for the last fiscal year's total revenue generated by Funko Cl A. The default revenue input number comes from 2016 income statement of Funko Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our FNKO stock valuation model: a) initial revenue growth rate of 21.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.3%, whose default value for FNKO is calculated based on our internal credit rating of Funko Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Funko Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of FNKO stock the variable cost ratio is equal to 82.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $32 million in the base year in the intrinsic value calculation for FNKO stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.2% for Funko Cl A.

Corporate tax rate of 27% is the nominal tax rate for Funko Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the FNKO stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for FNKO are equal to 63.5%.

Life of production assets of 15.3 years is the average useful life of capital assets used in Funko Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for FNKO is equal to 14.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $217 million for Funko Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 22.952 million for Funko Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Funko Cl A at the current share price and the inputted number of shares is $0.2 billion.

Financial statements of FNKO
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