Funko (NASDAQ:FNKO – Get Free Report) and JAKKS Pacific (NASDAQ:JAKK – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.
Risk & Volatility
Funko has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, JAKKS Pacific has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.
Earnings and Valuation
This table compares Funko and JAKKS Pacific”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Funko | $908.21 million | 0.39 | -$67.36 million | ($0.04) | -160.25 |
| JAKKS Pacific | $627.25 million | 0.58 | $9.87 million | $2.13 | 14.84 |
JAKKS Pacific has lower revenue, but higher earnings than Funko. Funko is trading at a lower price-to-earnings ratio than JAKKS Pacific, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings for Funko and JAKKS Pacific, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Funko | 1 | 2 | 1 | 0 | 2.00 |
| JAKKS Pacific | 0 | 1 | 2 | 0 | 2.67 |
Funko currently has a consensus price target of $7.08, suggesting a potential upside of 10.50%. JAKKS Pacific has a consensus price target of $57.00, suggesting a potential upside of 80.38%. Given JAKKS Pacific’s stronger consensus rating and higher possible upside, analysts clearly believe JAKKS Pacific is more favorable than Funko.
Profitability
This table compares Funko and JAKKS Pacific’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Funko | -0.21% | 2.61% | 0.71% |
| JAKKS Pacific | 4.17% | 8.18% | 4.57% |
Institutional & Insider Ownership
99.2% of Funko shares are held by institutional investors. Comparatively, 44.4% of JAKKS Pacific shares are held by institutional investors. 3.9% of Funko shares are held by insiders. Comparatively, 4.2% of JAKKS Pacific shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
JAKKS Pacific beats Funko on 11 of the 14 factors compared between the two stocks.
About Funko
Funko, Inc., a pop culture consumer products company, designs, sources, and distributes licensed pop culture products in the United States, Europe, and internationally. The company provides media and entertainment content, including movies, television (TV) shows, video games, music, and sports; figures, handbags, backpacks, wallets, apparel, accessories, plush products, homewares, and digital non-fungible tokens; and art prints and vinyl records, posters, soundtracks, toys, books, games, and other collectibles. It markets its products under the Pop!, Loungefly, Funko, Mystery Minis, Bitty Pop!, Funko action figures, Funko Plush, and Funko Soda brand names; and licenses its properties under the classic evergreen, movie release, current TV, and current video game categories. The company sells its products through specialty retailers, mass-market retailers, e-commerce sites, and distributors; and at specialty licensing and comic book shows, conventions, and exhibitions, as well as through its e-commerce business. Funko, Inc. was incorporated in 2017 and is headquartered in Everett, Washington.
About JAKKS Pacific
JAKKS Pacific, Inc. designs, produces, markets, sells, and distributes toys and related products, electronic products, and other consumer products worldwide. It operates through two segments, Toys/Consumer Products and Costumes. The company offers action figures and accessories, such as licensed characters; toy vehicles and accessories; dolls and accessories, including small, large, fashion, and baby dolls based on licenses, as well as infant and pre-school products; private label products; and foot-to-floor ride-on products. The company also provides role play, dress-up, pretend play, and novelty products for boys and girls based on brands and entertainment properties, as well as on its own proprietary brands; and indoor and outdoor kids' furniture, activity trays and tables, room décor, and seasonal and outdoor products. In addition, it offers Halloween and everyday costumes for various ages based on licensed and proprietary non-licensed brands, and related Halloween accessories; outdoor activity toys; junior sports toys, including hyper-charged balls, sport sets, and toy hoops; and board games. The company sells its products through in-house sales staff and independent sales representatives to toy and mass-market retail chain stores, department stores, office supply stores, drug and grocery store chains, club stores, value-oriented dollar stores, toy specialty stores, and wholesalers. JAKKS Pacific, Inc. was incorporated in 1995 and is headquartered in Santa Monica, California.
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