FNKO VS PLBY: Which NFT stock is more attractive for investment?

The market for NFT stocks is recently booming, and investors have begun to show strong interest in NFT stocks.

NFT is a digital asset created using blockchain encryption technology, such as works of art, music or video, etc.

Each NFT has a unique digital signature to determine its unique attributes, making it difficult for NFTs to exchange with each other.

NFT provides a unique way for content creators to earn income by paying copyright fees or selling their artworks directly to consumers.

According to data provided by Forbes Advisor, since November 2017, nearly $174 million has been used for NFT transactions. On May 12, Eastern Time, eBay (EBAY.US) added NFT to its online shopping mall product list.

Funko (FNKO.US) and PLBY Group (PLBY.US) recently had the most popular NFT concept stocks, which stock is more attractive for investment?

Let's look at what Wall Street analysts think of these two stocks.

Funko is a pop culture consumer goods company whose products include plush and action toys, clothing, board games, and accessories.

Earlier this month, the company announced its first-quarter results. Revenue increased by 38% year-on-year to US$189.2 million, while adjusted EBITDA was US$29.8 million, compared with US$10.6 million in the same period last year.

In the 2021 fiscal year, Funko expects sales to grow by 33% to 38%, and the adjusted EBITDA margin is expected to be between 14% and 14.5%. The company expects adjusted diluted earnings per share to be between US$0.98 and US$1.12.

Last month, the company entered the NFT market by acquiring equity in TokenWave. TokenWave has developed TokenHead, a website and mobile application that displays and tracks about 10 million NFTs and has about 100,000 visits per day. It can be used on iOS and Android platforms.

This investment is expected to expand Funko's popular culture platform to include digital assets. The company expects to launch its first batch of NFTs in June this year, priced at $9.99. The company will sell its NFT on the WAX platform, a decentralized online payment platform using blockchain technology.

Funko's CEO Brian Mariotti believes that the profit margin of the NFT business is likely to be higher than that of other consumer goods businesses, but it is not expected that the profit margin will be materially affected in the next year or two.

He also believes that if NFT buyers have never purchased the company's physical products, they can start buying immediately, and vice versa, which will strengthen the company's diversified product advantages.

It is worth noting that the company's 2021 fiscal year performance forecast does not include the revenue obtained through the NFT business.

Last month, following Funko's investment in TokenWave, JPMorgan Chase analyst Tami Zakaria raised his target price from US$20 to US$25 and reiterated his "hold" rating on the stock.

Zakaria believes that the stock's current risk-reward ratio is attractive, and expects that the NFT business may contribute to the growth of fiscal 2021 and fiscal 2022 performance. The consensus rating of other Wall Street analysts is "moderate-buy", with an average target price of $23.13.

PLBY Group is a company integrating leisure, life, and entertainment businesses, and is also the owner of the Playboy brand.

On May 12, Eastern Time, the company announced its first-quarter financial report. The data showed that revenue was 42.7 million U.S. dollars, a year-on-year increase of 34%.

The main reason for the increase in revenue was that direct-to-consumer revenue increased by 114% year-on-year. However, the company's net loss in the first quarter expanded to 5 million U.S. dollars, compared with a loss of 2.4 million U.S. dollars in the same period last year, mainly due to the cost of completing the company's acquisition.

PLBY CEO Ben Kohn said, "The performance of our first NFT art exhibition recently made us very excited. It symbolizes that we can create imaginative products based on our iconic flagship brand and rich original content. product experience".

Kohn added: "We are in the early stages of development of intellectual property rights and global fan base accumulation. We have huge development potential. At present, we are still focusing on finding investment opportunities to drive outstanding long-term growth and bring substantial growth to shareholders. Long-term value."

Last month, PLBY announced a partnership with Nifty Gateway. Nifty Gateway is a comprehensive platform under Gemini that can be used to buy, sell and store collectibles and digital art.

This partnership will promote the use of blockchain technology for a series of digital art collaborations between the Playboy brand on the Nifty Gateway platform. Kohn said that the Playboy-themed NFT can effectively cross-sell the company's physical products with digital art.

This partnership has helped Playboy and the artist Slimesunday collaborate to launch digital artwork, which was launched earlier this month.

PLBY stated on its earnings conference call that this artwork generated approximately $1 million in sales within 24 hours, including a single item that sold for $250,000. The partnership will also promote a collaboration between PLBY and digital artist Blake Kathryn in June to host an NFT curatorial event with the theme of Pride.

Canaccord Genuity analyst Austin Moldow raised the target price of PLBY from $28 to $52 and reiterated its "buy" rating.

Moldow mentioned in a research report to investors, “The company has achieved a long-term strategy in NFT and other emerging technologies such as blockchain, VR and AR, and is committed to the integration of physical and digital technologies. We believe that PLBY seems to be developing an NFT sales strategy, which may create new works based on its intellectual property rights, which will create a "never-ending" product supply chain."

The consensus rating of other Wall Street analysts is "Strong Buy", with an average target price of $45.67.

Both PLBY and Funko monetized their consumer products into the NFT field through blockchain encryption technology. In the process, they created cross-selling opportunities and continuously promoted the diversified development of products.

PLBY and Funko are also in the early stages of development, but through comparison, it can be seen that analysts seem to be more optimistic about PLBY.

First of all, from the upside potential given by analysts, PLBY seems to be a better choice. Secondly, compared to Funko, which has just completed the acquisition, the certainty of PLBY, which has already launched NFT works and received high praise, seems to be greater, and PLBY's brand effect and artist reserve seem to have the same advantages.

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