Funko: Avoid This Stock As Sales Pull Back Further

Gary Alexander33.5K FollowersFollow5ShareSavePlay(8min)CommentsSummaryFunko faces persistent double-digit revenue declines amid weak consumer spending and cautious retail partners, raising significant red flags.FNKO's gross margins are pressured by tariffs and inventory write-offs, with margins falling below 50% and a recent 4-point tariff impact.With $224M in gross debt and a 2.4x leverage ratio, FNKO's financial flexibility is limited as sales and profitability wane.Despite trading at 4.6x EV/FY26 EBITDA, operational risks and uncertain recovery prospects justify maintaining a sell rating.

Getty Images In tough macroeconomic environments, weak companies often sink. Amid oil-driven inflation and a still-weak consumer spending environment, we're cautious about struggling companies like Funko (FNKO), the maker of Pop! collectible figurines. Since the start of the year, sharesThis article was written byGary Alexander33.5K FollowersFollowWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.