Investment Thesis
Funko faces severe operational deterioration with declining revenue (-13.5% YoY), deeply negative profitability (net margin -9.0%, operating margin -4.8%), and a $18.1M net loss. Weak liquidity ratios (Current: 1.15x, Quick: 0.78x) combined with $90.9M debt and minimal free cash flow margin (1.0%) provide insufficient financial flexibility for the business to recover or service obligations through a downcycle.
Strengths
- Operating cash flow remains positive at $10.2M despite unprofitability
- Free cash flow is positive at $1.9M, demonstrating ability to avoid immediate insolvency
- Debt-to-equity ratio of 0.54x indicates moderate leverage relative to equity base
Risks
- Collapsing profitability with net income down 358.5% YoY while revenue declines 13.5%
- Inadequate liquidity with Current Ratio of 1.15x and Quick Ratio of 0.78x against $90.9M debt obligations
- Razor-thin free cash flow margin of 1.0% leaves no cushion for operational disruptions or debt service stress
Key Metrics to Watch
- Revenue stabilization and gross margin recovery
- Operating cash flow sustainability and working capital trends
- Debt covenant compliance and refinancing risk maturity schedule
Financial Metrics
Revenue
200.9M
Net Income
-18.1M
EPS (Diluted)
$-0.33
Free Cash Flow
1.9M
Total Assets
625.9M
Cash
34.3M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-4.8%
Net Margin
-9.0%
ROE
-10.7%
ROA
-2.9%
FCF Margin
1.0%
Balance Sheet & Liquidity
Current Ratio
1.15x
Quick Ratio
0.78x
Debt/Equity
0.54x
Debt/Assets
0.0%
Interest Coverage
N/A
Long-term Debt
90.9M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T10:40:19.208664 |
Data as of: 2026-03-31 |
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