Intrinsic value of Funko, Inc. - FNKO

Previous Close

$18.85

  Intrinsic Value

$36.08

stock screener

  Rating & Target

str. buy

+91%

Previous close

$18.85

 
Intrinsic value

$36.08

 
Up/down potential

+91%

 
Rating

str. buy

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

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  37.60
  34.34
  31.41
  28.77
  26.39
  24.25
  22.32
  20.59
  19.03
  17.63
  16.37
  15.23
  14.21
  13.29
  12.46
  11.71
  11.04
  10.44
  9.89
  9.40
  8.96
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
Revenue, $m
  944
  1,268
  1,666
  2,146
  2,712
  3,370
  4,122
  4,971
  5,917
  6,960
  8,099
  9,332
  10,658
  12,074
  13,578
  15,169
  16,843
  18,601
  20,442
  22,364
  24,368
  26,456
  28,628
  30,887
  33,234
  35,674
  38,209
  40,844
  43,583
  46,431
Variable operating expenses, $m
  824
  1,106
  1,452
  1,868
  2,360
  2,931
  3,585
  4,322
  5,143
  6,049
  7,034
  8,106
  9,257
  10,487
  11,794
  13,175
  14,630
  16,157
  17,755
  19,425
  21,166
  22,979
  24,866
  26,828
  28,867
  30,986
  33,188
  35,476
  37,855
  40,329
Fixed operating expenses, $m
  25
  25
  26
  26
  27
  27
  28
  29
  29
  30
  30
  31
  32
  33
  33
  34
  35
  36
  36
  37
  38
  39
  40
  40
  41
  42
  43
  44
  45
  46
Total operating expenses, $m
  849
  1,131
  1,478
  1,894
  2,387
  2,958
  3,613
  4,351
  5,172
  6,079
  7,064
  8,137
  9,289
  10,520
  11,827
  13,209
  14,665
  16,193
  17,791
  19,462
  21,204
  23,018
  24,906
  26,868
  28,908
  31,028
  33,231
  35,520
  37,900
  40,375
Operating income, $m
  95
  137
  189
  251
  325
  411
  509
  620
  744
  880
  1,034
  1,195
  1,369
  1,554
  1,751
  1,959
  2,179
  2,409
  2,650
  2,902
  3,164
  3,438
  3,723
  4,018
  4,326
  4,646
  4,978
  5,323
  5,682
  6,056
EBITDA, $m
  129
  182
  246
  324
  416
  522
  644
  782
  936
  1,105
  1,290
  1,491
  1,706
  1,937
  2,181
  2,440
  2,712
  2,998
  3,298
  3,610
  3,937
  4,276
  4,630
  4,997
  5,379
  5,776
  6,189
  6,617
  7,063
  7,527
Interest expense (income), $m
  12
  22
  39
  61
  87
  119
  157
  201
  251
  307
  370
  439
  515
  597
  685
  779
  879
  984
  1,096
  1,212
  1,335
  1,462
  1,596
  1,734
  1,879
  2,029
  2,185
  2,347
  2,515
  2,690
  2,872
Earnings before tax, $m
  73
  98
  128
  164
  206
  254
  309
  370
  437
  511
  595
  681
  772
  869
  972
  1,081
  1,194
  1,313
  1,438
  1,567
  1,702
  1,842
  1,988
  2,140
  2,297
  2,461
  2,631
  2,808
  2,992
  3,183
Tax expense, $m
  20
  26
  35
  44
  56
  69
  83
  100
  118
  138
  161
  184
  208
  235
  263
  292
  322
  355
  388
  423
  460
  497
  537
  578
  620
  665
  710
  758
  808
  860
Net income, $m
  53
  71
  93
  120
  150
  186
  225
  270
  319
  373
  434
  497
  564
  635
  710
  789
  872
  959
  1,049
  1,144
  1,242
  1,345
  1,451
  1,562
  1,677
  1,797
  1,921
  2,050
  2,184
  2,324

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  912
  1,225
  1,610
  2,073
  2,620
  3,256
  3,982
  4,802
  5,717
  6,724
  7,825
  9,017
  10,298
  11,666
  13,119
  14,656
  16,274
  17,972
  19,750
  21,608
  23,544
  25,561
  27,660
  29,842
  32,110
  34,467
  36,917
  39,462
  42,109
  44,861
Adjusted assets (=assets-cash), $m
  912
  1,225
  1,610
  2,073
  2,620
  3,256
  3,982
  4,802
  5,717
  6,724
  7,825
  9,017
  10,298
  11,666
  13,119
  14,656
  16,274
  17,972
  19,750
  21,608
  23,544
  25,561
  27,660
  29,842
  32,110
  34,467
  36,917
  39,462
  42,109
  44,861
Revenue / Adjusted assets
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
  1.035
Average production assets, $m
  302
  406
  533
  687
  868
  1,078
  1,319
  1,591
  1,893
  2,227
  2,592
  2,986
  3,411
  3,864
  4,345
  4,854
  5,390
  5,952
  6,541
  7,156
  7,798
  8,466
  9,161
  9,884
  10,635
  11,416
  12,227
  13,070
  13,946
  14,858
Working capital, $m
  193
  259
  340
  438
  553
  687
  841
  1,014
  1,207
  1,420
  1,652
  1,904
  2,174
  2,463
  2,770
  3,094
  3,436
  3,795
  4,170
  4,562
  4,971
  5,397
  5,840
  6,301
  6,780
  7,277
  7,795
  8,332
  8,891
  9,472
Total debt, $m
  438
  677
  971
  1,325
  1,743
  2,228
  2,783
  3,410
  4,108
  4,878
  5,719
  6,630
  7,608
  8,654
  9,764
  10,938
  12,174
  13,472
  14,830
  16,249
  17,729
  19,270
  20,873
  22,540
  24,273
  26,074
  27,945
  29,890
  31,912
  34,015
Total liabilities, $m
  697
  936
  1,230
  1,584
  2,002
  2,487
  3,043
  3,669
  4,367
  5,137
  5,978
  6,889
  7,867
  8,913
  10,023
  11,197
  12,433
  13,731
  15,089
  16,508
  17,988
  19,529
  21,132
  22,799
  24,532
  26,333
  28,204
  30,149
  32,171
  34,274
Total equity, $m
  215
  289
  380
  489
  618
  768
  940
  1,133
  1,349
  1,587
  1,847
  2,128
  2,430
  2,753
  3,096
  3,459
  3,841
  4,241
  4,661
  5,099
  5,556
  6,032
  6,528
  7,043
  7,578
  8,134
  8,712
  9,313
  9,938
  10,587
Total liabilities and equity, $m
  912
  1,225
  1,610
  2,073
  2,620
  3,255
  3,983
  4,802
  5,716
  6,724
  7,825
  9,017
  10,297
  11,666
  13,119
  14,656
  16,274
  17,972
  19,750
  21,607
  23,544
  25,561
  27,660
  29,842
  32,110
  34,467
  36,916
  39,462
  42,109
  44,861
Debt-to-equity ratio
  2.030
  2.340
  2.560
  2.710
  2.820
  2.900
  2.960
  3.010
  3.050
  3.070
  3.100
  3.120
  3.130
  3.140
  3.150
  3.160
  3.170
  3.180
  3.180
  3.190
  3.190
  3.190
  3.200
  3.200
  3.200
  3.210
  3.210
  3.210
  3.210
  3.210
Adjusted equity ratio
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  53
  71
  93
  120
  150
  186
  225
  270
  319
  373
  434
  497
  564
  635
  710
  789
  872
  959
  1,049
  1,144
  1,242
  1,345
  1,451
  1,562
  1,677
  1,797
  1,921
  2,050
  2,184
  2,324
Depreciation, amort., depletion, $m
  34
  45
  57
  72
  90
  111
  135
  162
  192
  225
  257
  296
  338
  383
  430
  481
  534
  589
  648
  709
  772
  838
  907
  979
  1,053
  1,130
  1,211
  1,294
  1,381
  1,471
Funds from operations, $m
  87
  116
  151
  192
  241
  297
  360
  432
  511
  598
  691
  792
  901
  1,017
  1,140
  1,269
  1,405
  1,548
  1,697
  1,853
  2,015
  2,183
  2,358
  2,541
  2,730
  2,927
  3,131
  3,344
  3,565
  3,795
Change in working capital, $m
  53
  66
  81
  98
  116
  134
  153
  173
  193
  213
  232
  252
  270
  289
  307
  324
  342
  359
  375
  392
  409
  426
  443
  461
  479
  498
  517
  537
  559
  581
Cash from operations, $m
  35
  50
  69
  94
  125
  163
  207
  259
  318
  385
  458
  541
  631
  728
  833
  945
  1,064
  1,189
  1,322
  1,460
  1,606
  1,757
  1,915
  2,080
  2,251
  2,429
  2,614
  2,807
  3,006
  3,214
Maintenance CAPEX, $m
  -22
  -30
  -40
  -53
  -68
  -86
  -107
  -131
  -157
  -187
  -221
  -257
  -296
  -338
  -383
  -430
  -481
  -534
  -589
  -648
  -709
  -772
  -838
  -907
  -979
  -1,053
  -1,130
  -1,211
  -1,294
  -1,381
New CAPEX, $m
  -83
  -104
  -127
  -153
  -181
  -210
  -241
  -272
  -303
  -334
  -365
  -395
  -424
  -453
  -481
  -509
  -536
  -563
  -589
  -615
  -641
  -668
  -695
  -723
  -751
  -781
  -811
  -843
  -876
  -911
Cash from investing activities, $m
  -105
  -134
  -167
  -206
  -249
  -296
  -348
  -403
  -460
  -521
  -586
  -652
  -720
  -791
  -864
  -939
  -1,017
  -1,097
  -1,178
  -1,263
  -1,350
  -1,440
  -1,533
  -1,630
  -1,730
  -1,834
  -1,941
  -2,054
  -2,170
  -2,292
Free cash flow, $m
  -70
  -84
  -98
  -112
  -124
  -134
  -141
  -144
  -142
  -136
  -127
  -110
  -89
  -62
  -31
  6
  47
  93
  143
  198
  256
  317
  382
  450
  521
  596
  673
  753
  836
  922
Issuance/(repayment) of debt, $m
  190
  239
  294
  354
  418
  485
  555
  627
  698
  770
  841
  910
  979
  1,045
  1,110
  1,174
  1,236
  1,298
  1,358
  1,419
  1,480
  1,541
  1,603
  1,667
  1,733
  1,801
  1,871
  1,945
  2,022
  2,103
Issuance/(repurchase) of shares, $m
  5
  3
  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  
  195
  242
  294
  354
  418
  485
  555
  627
  698
  770
  841
  910
  979
  1,045
  1,110
  1,174
  1,236
  1,298
  1,358
  1,419
  1,480
  1,541
  1,603
  1,667
  1,733
  1,801
  1,871
  1,945
  2,022
  2,103
Total cash flow (excl. dividends), $m
  126
  158
  196
  242
  294
  352
  415
  483
  556
  634
  714
  800
  890
  983
  1,080
  1,180
  1,284
  1,391
  1,502
  1,617
  1,735
  1,858
  1,985
  2,117
  2,254
  2,396
  2,544
  2,698
  2,858
  3,024
Retained Cash Flow (-), $m
  -59
  -74
  -91
  -109
  -129
  -150
  -172
  -194
  -216
  -238
  -260
  -281
  -302
  -323
  -343
  -363
  -382
  -401
  -420
  -438
  -457
  -476
  -495
  -515
  -535
  -556
  -578
  -601
  -625
  -649
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
  68
  84
  105
  133
  165
  202
  243
  289
  340
  396
  454
  519
  587
  660
  737
  817
  902
  990
  1,082
  1,178
  1,278
  1,382
  1,490
  1,602
  1,719
  1,840
  1,966
  2,097
  2,233
  2,375
Discount rate, %
  8.20
  8.61
  9.04
  9.49
  9.97
  10.47
  10.99
  11.54
  12.12
  12.72
  13.36
  14.02
  14.73
  15.46
  16.24
  17.05
  17.90
  18.79
  19.73
  20.72
  21.76
  22.84
  23.99
  25.19
  26.45
  27.77
  29.16
  30.61
  32.15
  33.75
PV of cash for distribution, $m
  63
  71
  81
  92
  103
  111
  117
  121
  122
  120
  114
  107
  98
  88
  77
  66
  55
  45
  35
  27
  20
  15
  11
  7
  5
  3
  2
  1
  1
  0
Current shareholders' claim on cash, %
  99.4
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2

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.

FINANCIAL RATIOS  of  Funko, Inc. (FNKO)

Valuation Ratios
P/E Ratio 32.3
Price to Sales 2
Price to Book 4
Price to Tangible Book
Price to Cash Flow 17.8
Price to Free Cash Flow 31.2
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 $686 million for the last fiscal year's total revenue generated by Funko, Inc.. The default revenue input number comes from 0001 income statement of Funko, Inc.. 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 37.6% 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 8.2%, whose default value for FNKO is calculated based on our internal credit rating of Funko, Inc., 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, Inc..
    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 87.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $24 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 9% for Funko, Inc..

Corporate tax rate of 27% is the nominal tax rate for Funko, Inc.. 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 32%.

Life of production assets of 10.1 years is the average useful life of capital assets used in Funko, Inc. 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 20.4%. 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 - $156.638 million for Funko, Inc. - 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 48.938 million for Funko, Inc. 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, Inc. at the current share price and the inputted number of shares is $0.9 billion.

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