Financial Analysis: Funko (NASDAQ:FNKO) and Peloton Interactive (NASDAQ:PTON)

Funko (NASDAQ:FNKO) and Peloton Interactive (NASDAQ:PTON) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Volatility and Risk

Funko has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Peloton Interactive has a beta of 2.52, meaning that its stock price is 152% more volatile than the S&P 500.

Institutional and Insider Ownership

99.2% of Funko shares are held by institutional investors. Comparatively, 77.0% of Peloton Interactive shares are held by institutional investors. 3.9% of Funko shares are held by insiders. Comparatively, 1.3% of Peloton Interactive shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Funko and Peloton Interactive’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%
Peloton Interactive	2.58%	-23.92%	3.00%

Analyst Recommendations

This is a breakdown of recent ratings for Funko and Peloton Interactive, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Funko	1	2	1	0	2.00
Peloton Interactive	1	7	5	0	2.31

Funko currently has a consensus target price of $7.08, indicating a potential downside of 0.23%. Peloton Interactive has a consensus target price of $7.94, indicating a potential upside of 45.77%. Given Peloton Interactive’s stronger consensus rating and higher possible upside, analysts clearly believe Peloton Interactive is more favorable than Funko.

Valuation & Earnings

This table compares Funko and Peloton Interactive”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Funko	$932.64 million	0.43	-$67.36 million	($0.04)	-177.50
Peloton Interactive	$2.45 billion	0.98	$63.20 million	$0.12	45.42

Peloton Interactive has higher revenue and earnings than Funko. Funko is trading at a lower price-to-earnings ratio than Peloton Interactive, indicating that it is currently the more affordable of the two stocks.

Summary

Peloton Interactive 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 Peloton Interactive

Peloton Interactive, Inc. operates interactive fitness platform in North America and internationally. The company offers connected fitness products with touchscreen that streams live and on-demand classes under the Peloton Bike, Peloton Bike+, Peloton Tread, Peloton Tread+, Peloton Guide, and Peloton Row names. The company markets and sells its interactive fitness products directly through its retail showrooms and at onepeloton.com. Peloton Interactive, Inc. was founded in 2012 and is headquartered in New York, New York.