Intrinsic value of Funko Cl A - FNKO

Previous Close

$17.04

  Intrinsic Value

$16.51

stock screener

  Rating & Target

hold

-3%

Previous close

$17.04

 
Intrinsic value

$16.51

 
Up/down potential

-3%

 
Rating

hold

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 0.4

 

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, %
  3.60
  3.74
  3.87
  3.98
  4.08
  4.17
  4.26
  4.33
  4.40
  4.46
  4.51
  4.56
  4.60
  4.64
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.93
Revenue, $m
  535
  555
  576
  599
  623
  649
  677
  706
  738
  770
  805
  842
  881
  922
  965
  1,010
  1,058
  1,108
  1,162
  1,217
  1,276
  1,338
  1,403
  1,472
  1,543
  1,619
  1,699
  1,782
  1,870
  1,962
Variable operating expenses, $m
  478
  495
  513
  532
  552
  573
  596
  620
  646
  673
  666
  696
  728
  762
  798
  835
  875
  917
  961
  1,007
  1,055
  1,107
  1,160
  1,217
  1,276
  1,339
  1,405
  1,474
  1,546
  1,623
Fixed operating expenses, $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 operating expenses, $m
  478
  495
  513
  532
  552
  573
  596
  620
  646
  673
  666
  696
  728
  762
  798
  835
  875
  917
  961
  1,007
  1,055
  1,107
  1,160
  1,217
  1,276
  1,339
  1,405
  1,474
  1,546
  1,623
Operating income, $m
  56
  60
  64
  68
  72
  76
  81
  86
  91
  97
  139
  146
  152
  159
  167
  175
  183
  192
  201
  211
  221
  232
  243
  255
  267
  280
  294
  308
  324
  340
EBITDA, $m
  111
  115
  119
  124
  129
  134
  140
  146
  152
  159
  166
  174
  182
  191
  199
  209
  219
  229
  240
  252
  264
  277
  290
  304
  319
  335
  351
  368
  387
  406
Interest expense (income), $m
  12
  32
  34
  37
  40
  43
  46
  49
  53
  57
  61
  65
  70
  75
  80
  85
  91
  97
  103
  110
  117
  124
  132
  140
  148
  157
  167
  177
  187
  198
  210
Earnings before tax, $m
  25
  26
  27
  28
  29
  30
  32
  33
  35
  36
  74
  76
  78
  80
  82
  84
  86
  89
  91
  94
  97
  100
  103
  106
  110
  113
  117
  121
  125
  130
Tax expense, $m
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  20
  20
  21
  22
  22
  23
  23
  24
  25
  25
  26
  27
  28
  29
  30
  31
  32
  33
  34
  35
Net income, $m
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  54
  55
  57
  58
  60
  61
  63
  65
  67
  69
  71
  73
  75
  78
  80
  83
  85
  88
  91
  95

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
  653
  677
  703
  731
  761
  793
  827
  863
  901
  941
  983
  1,028
  1,075
  1,125
  1,178
  1,233
  1,292
  1,353
  1,418
  1,486
  1,558
  1,634
  1,713
  1,797
  1,885
  1,977
  2,074
  2,176
  2,283
  2,396
Adjusted assets (=assets-cash), $m
  653
  677
  703
  731
  761
  793
  827
  863
  901
  941
  983
  1,028
  1,075
  1,125
  1,178
  1,233
  1,292
  1,353
  1,418
  1,486
  1,558
  1,634
  1,713
  1,797
  1,885
  1,977
  2,074
  2,176
  2,283
  2,396
Revenue / Adjusted assets
  0.819
  0.820
  0.819
  0.819
  0.819
  0.818
  0.819
  0.818
  0.819
  0.818
  0.819
  0.819
  0.820
  0.820
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
Average production assets, $m
  216
  224
  233
  242
  252
  262
  274
  285
  298
  311
  325
  340
  356
  372
  390
  408
  427
  448
  469
  492
  516
  541
  567
  595
  624
  654
  686
  720
  755
  793
Working capital, $m
  109
  113
  118
  122
  127
  132
  138
  144
  150
  157
  164
  172
  180
  188
  197
  206
  216
  226
  237
  248
  260
  273
  286
  300
  315
  330
  347
  364
  381
  400
Total debt, $m
  252
  271
  292
  314
  338
  363
  390
  418
  448
  480
  513
  549
  586
  626
  668
  712
  758
  807
  858
  912
  969
  1,029
  1,092
  1,158
  1,227
  1,300
  1,377
  1,458
  1,543
  1,632
Total liabilities, $m
  517
  536
  557
  579
  603
  628
  655
  683
  713
  745
  779
  814
  852
  891
  933
  977
  1,023
  1,072
  1,123
  1,177
  1,234
  1,294
  1,357
  1,423
  1,493
  1,566
  1,643
  1,723
  1,808
  1,898
Total equity, $m
  136
  141
  146
  152
  158
  165
  172
  179
  187
  196
  204
  214
  224
  234
  245
  257
  269
  282
  295
  309
  324
  340
  356
  374
  392
  411
  431
  453
  475
  498
Total liabilities and equity, $m
  653
  677
  703
  731
  761
  793
  827
  862
  900
  941
  983
  1,028
  1,076
  1,125
  1,178
  1,234
  1,292
  1,354
  1,418
  1,486
  1,558
  1,634
  1,713
  1,797
  1,885
  1,977
  2,074
  2,176
  2,283
  2,396
Debt-to-equity ratio
  1.850
  1.920
  1.990
  2.060
  2.130
  2.200
  2.270
  2.330
  2.390
  2.450
  2.510
  2.570
  2.620
  2.670
  2.730
  2.770
  2.820
  2.870
  2.910
  2.950
  2.990
  3.030
  3.060
  3.100
  3.130
  3.160
  3.190
  3.220
  3.250
  3.280
Adjusted equity ratio
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208
  0.208

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  54
  55
  57
  58
  60
  61
  63
  65
  67
  69
  71
  73
  75
  78
  80
  83
  85
  88
  91
  95
Depreciation, amort., depletion, $m
  54
  55
  56
  56
  57
  58
  59
  60
  61
  62
  27
  28
  30
  31
  32
  34
  36
  37
  39
  41
  43
  45
  47
  50
  52
  55
  57
  60
  63
  66
Funds from operations, $m
  72
  74
  75
  77
  78
  80
  82
  84
  86
  89
  81
  84
  86
  89
  92
  95
  99
  102
  106
  110
  114
  118
  122
  127
  132
  137
  143
  148
  154
  161
Change in working capital, $m
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
Cash from operations, $m
  68
  69
  71
  72
  73
  75
  76
  78
  80
  82
  74
  76
  79
  81
  83
  86
  89
  92
  95
  98
  102
  105
  109
  113
  117
  122
  126
  131
  137
  142
Maintenance CAPEX, $m
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -36
  -37
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -57
  -60
  -63
New CAPEX, $m
  -7
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -35
  -37
Cash from investing activities, $m
  -24
  -26
  -28
  -28
  -30
  -32
  -33
  -35
  -37
  -38
  -40
  -42
  -44
  -47
  -48
  -50
  -53
  -56
  -58
  -62
  -65
  -68
  -71
  -75
  -79
  -83
  -87
  -91
  -95
  -100
Free cash flow, $m
  44
  43
  43
  43
  43
  43
  43
  43
  44
  44
  34
  34
  34
  35
  35
  35
  36
  36
  36
  37
  37
  37
  38
  38
  39
  39
  40
  40
  41
  42
Issuance/(repayment) of debt, $m
  18
  19
  21
  22
  24
  25
  27
  28
  30
  32
  34
  36
  37
  40
  42
  44
  46
  49
  51
  54
  57
  60
  63
  66
  70
  73
  77
  81
  85
  89
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  18
  19
  21
  22
  24
  25
  27
  28
  30
  32
  34
  36
  37
  40
  42
  44
  46
  49
  51
  54
  57
  60
  63
  66
  70
  73
  77
  81
  85
  89
Total cash flow (excl. dividends), $m
  61
  63
  64
  65
  67
  69
  70
  72
  74
  76
  68
  70
  72
  74
  77
  79
  82
  85
  88
  91
  94
  97
  101
  104
  108
  112
  117
  121
  126
  131
Retained Cash Flow (-), $m
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
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
  57
  58
  59
  60
  61
  62
  63
  64
  66
  67
  59
  60
  62
  64
  66
  68
  70
  72
  74
  76
  79
  81
  84
  87
  90
  93
  97
  100
  104
  107
Discount rate, %
  9.70
  10.19
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.38
  29.79
  31.28
  32.85
  34.49
  36.21
  38.03
  39.93
PV of cash for distribution, $m
  52
  47
  43
  39
  35
  31
  27
  23
  20
  17
  12
  10
  8
  6
  5
  4
  3
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

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 Cl A (FNKO)

Valuation Ratios
P/E Ratio 29.2
Price to Sales 1.8
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 16.1
Price to Free Cash Flow 28.2
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 $516.084 million for the last fiscal year's total revenue generated by Funko Cl A. The default revenue input number comes from 0001 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 3.6% 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 9.7%, 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 89.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 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 13.6% 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 40.4%.

Life of production assets of 12 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 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 - $131.167 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 23.338 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 $0.4 billion.

COMPANY NEWS

▶ Why Funko Is Up 141% in 2018 So Far   [Nov-19-18 10:58AM  Motley Fool]
▶ 5 Top Stock Trades for Monday: Netflix Is in a Bear Market   [Nov-11-18 05:00PM  InvestorPlace]
▶ Why Funko, Inc. Stock Dropped 21% Today   [Nov-09-18 07:11PM  Motley Fool]
▶ Why Shares of Funko, Inc. Fell 20.4% in October   [Nov-06-18 07:41PM  Motley Fool]
▶ Funko Appoints Michael Lunsford to Board of Directors   [Oct-22-18 04:05PM  GlobeNewswire]
▶ Hasbro Chases Funko Into the Fortnite Market   [Sep-12-18 10:00PM  Motley Fool]
▶ Nasdaq Up, But Stock Market Breadth Wanes; This FANG Stock Faces Key Test   [Sep-11-18 05:00PM  Investor's Business Daily]
▶ Why Funko Inc. Stock Just Dropped 14%   [12:44PM  Motley Fool]
▶ Hasbro Signs Deal to Make Fortnite Toys and Games   [Sep-10-18 12:51PM  InvestorPlace]
▶ Estimating The Fair Value Of Funko Inc (NASDAQ:FNKO)   [Sep-07-18 03:40PM  Simply Wall St.]
▶ GameStop Stock Bulls Look to Earnings   [Aug-31-18 10:29AM  InvestorPlace]
▶ Funko is toying with the idea of flagship stores in New York, LA and Chicago   [Aug-22-18 04:33PM  American City Business Journals]
▶ Funko (FNKO) Stock Declines on in-Line Q2 Earnings   [Aug-09-18 06:09PM  InvestorPlace]
▶ Funko Stock Is Ready to Pop on the Pop Culture Toy Boom   [Aug-08-18 11:27AM  InvestorPlace]
▶ Why Funko, Inc. Shares Climbed 40% in July   [Aug-02-18 05:11PM  Motley Fool]
▶ Funko (FNKO) in Focus: Stock Moves 7.2% Higher   [Jul-24-18 08:50AM  Zacks]
▶ Could Funko Become the Next Hasbro or Mattel?   [Jul-19-18 06:03PM  Motley Fool]
▶ Funko Stock Soars on Fortnite Toys Deal   [11:12AM  InvestorPlace]
▶ Keep Your Eye on This Pop Culture Stock   [Jul-07-18 02:03PM  Motley Fool]

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