Funko (FNKO), best known as the maker of the iconic pop culture collectibles, has been highly exposed to economic headwinds like tariffs and recession risks this year. With much of its production based outside the U.S., mainly in Vietnam and China, along with facilities in Mexico, Cambodia, and the U.S., the company’s global exposure has weighed heavily on its stock performance in 2025. 

That pressure came into sharp focus recently during the company’s latest earnings call, when CFO Yves LePendeven highlighted a potential $45 million hit to the bottom line from tariffs, especially as Funko is holding off on price hikes for now. Nevertheless, after months of tariff turmoil, luck finally swung Funko’s way. 

On May 12, the stock rocketed a stunning 46.4% after the U.S. and China agreed to a temporary pause on their trade war escalations. Starting May 14, the U.S. will slash tariffs on Chinese goods from a steep 145% to a more tolerable 30%, while China drops its own from 125% to just 10%. For Funko, which was already bracing for a $45 million hit to its financials, the temporary trade truce is a rare win that landed just in time. So, with trade tensions finally easing, here's a closer look at FNKO stock.

About Funko Stock

Washington-based Funko, Inc. (FNKO) has grown into a recognizable name in pop culture collectibles. With brands like Loungefly and Mondo under its wing, the company spans a wide range of products, from vinyl figures and action toys to apparel and digital collectibles. Best known for its Pop! line, Funko offers fans creative ways to showcase their interests and connect with others. 

With a market cap sitting near $231.5 million, Funko has taken a beating in 2025. The pop culture collectible maker is down a staggering 68.7% YTD, while the broader S&P 500 Index ($SPX) has managed to rise marginally, up 1.3% YTD - making Funko’s underperformance all the more glaring. 

However, the shares have notched a five-day gain of more than 19%, helping to regain some lost ground.

With its stock stuck in a slump this year, FNKO is trading at just 0.24 times sales, a deep discount compared to the sector median of 0.92x and its own five-year average of 0.54x. The steep discount does reflect investor caution, but also leaves room for upside if Funko can turn the page on its recent struggles.

A Closer Look at Funko’s Q1 Earnings 

Funko’s fiscal 2025 first quarter earnings, released on May 8, painted a mixed picture for investors. Net sales came in at $190.7 million, down 11.6% year-over-year and just below Wall Street’s target. The company reported a wider adjusted loss of $0.33 per share compared to $0.17 a year ago, but the reported figure still managed to top analysts' estimates.

Gross margin of 40.3% was a slight improvement from 40% last year, even as gross profit slipped 10.9% annually to $76.9 million in the first quarter. On the cash front, reserves dipped to $25.9 million from $34.7 million at the close of 2024, suggesting the company is navigating through tighter financial waters.

While reflecting on the Q1 performance, CEO Cynthia Williams acknowledged that since early April, escalating and unpredictable tariff hikes, particularly on imports from China, have forced the company to act quickly to safeguard its margins and liquidity position. In response, Funko has tightened its belt with cost cuts, pricing adjustments, and a faster pivot away from China-based manufacturing.

The company now expects only about 5% of U.S.-bound products to come from China by year-end. Moreover, with the trade landscape constantly shifting, the company also made the tough call to withdraw its full-year 2025 outlook, citing too much uncertainty around global tariff policies to offer reliable projections.

What Do Analysts Expect for Funko Stock?

On May 14, Goldman Sachs gave Funko a much-needed boost, upgrading the stock from “Sell” to “Neutral”, a sign that Wall Street may be warming up to the struggling toy maker. While the firm did lower its price target from $7.00 to $5.50, the rating change signals growing confidence in Funko’s ability to weather recent challenges.

The investment bank’s change of heart follows Funko’s latest earnings call, where management rolled out a game plan to soften the blow from tariff troubles and tighten up operations. Plus, factoring in an unexpected break in U.S.-China trade tensions, the investment firm seems to believe FNKO’s outlook doesn’t look quite as gloomy as before. 

With only two analysts in coverage on FNKO, the “consensus” now stands at a more upbeat “Moderate Buy,” compared to the previous “Hold.” Goldman's price target of $5.50 indicates 30.9% potential upside from the current price levels.