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Funko and Matador Resources have been highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL –October 11, 2024 – Zacks Equity Research shares Funko, Inc. (FNKO - Free Report) , as the Bull of the Day and Matador Resources Co. (MTDR - Free Report) , as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Equinor ASA (EQNR - Free Report) , Shell plc (SHEL - Free Report) and Enbridge Inc. (ENB - Free Report) .

Here is a synopsis of all three stocks:

Bull of the Day:


Is Funko, Inc. back? This Zacks Rank #1 (Strong Buy) has new leadership and has reduced its inventory and debt.

Funko is a pop culture lifestyle brand. Its products includes vinyl figures, action toys, plush, apparel, housewares and accessories which allow fans to connect with their favorite pop culture brands and characters. In addition to its popular Pop! brand, it also owns Loungefly.

It is a small cap company with a market cap of $658 million.

New Leadership Takes the Helm

Funko has gone through a lot over the last 2 years including a shake-up of its leadership. But it now has two new leaders at the top of its management team.

Cynthia Williams took over as CEO in June 2024. In August 2024, Yves Le Pendeven, who had been with Funko for 5 years in various roles including Acting Chief Financial Officer, became the official CFO.

Funko Beats Big on Earnings in Q2 2024

On Aug 8, 2024, Funko reported its second quarter results and beat on the Zacks Consensus for the second quarter in a row. Earnings were $0.10 versus the Zacks Consensus of a loss of $0.14.

Sales rose year-over-year to $247.7 million from $240 million in 2023.

Core collectibles was the strong category, rising 6.4%. Sales were especially strong in Europe, which jumped 20.8%.

However, in the US, its largest market, sales fell 4.7%.

Funko has made great strides in reducing its inventory. In 2022, it was excess inventory which contributed to the company’s struggles.

Inventory was $109 million as of June 30, 2024, down from $119.5 million as of Dec 31, 2023.

Funko has also reduced its debt. Total debt was $223.9 million as of June 30, 2024, down from $273.6 million as of Dec 31, 2023.

Funko Reiterated Its 2024 Guidance

Funko reiterated its full year 2024 guidance, which assumes a strong holiday season. It sees sales of $1.047 billion to $1.103 billion.

The analysts are expecting improvement in the earnings outlook this year and next.

1 estimate has been raised in the last 60 days for 2024 which has pushed the Zacks Consensus up to $0.00 from a loss of $0.02. That is a big improvement from 2023 where the company lost $0.87.

2025 looks more bullish as analysts are looking for earnings of $0.35.

Shares Rally on Hope for the Turnaround

Funko shares plunged in 2022 when it was caught with excess inventory it had to write down. Many thought the Funko Pop! phenomena was over.

But in 2024, investors are now pricing in the new management. Shares of Funko have soared 62% this year, easily beating the S&P 500.

In addition to the Zacks Rank of Strong Buy, Funko also has the highest Zacks Style Scores for Value and Growth, of A.

Funko will report third quarter earnings in early November.

There are still challenges ahead, but investors who are interested in a play on fandom and the consumer, might want to keep Funko on their short list.

Bear of the Day:

Matador Resources Co. is an independent oil and gas company. Analysts are cutting this Zacks Rank #5 (Strong Sell)’s earnings estimates as the price of oil falls.

Matador is an energy company that explores and produces oil and natural gas in the United States. It is focused on shale and other unconventional plays. Current operations include Wolfcamp and Bone Springs plays in the Delaware Basin in Southeast New Mexico and West Texas.

It also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana.

Additionally, Matador has midstream operations which provides natural gas processing, oil transportation services, natural gas and produced water gathering services and produced water disposal services to third parties.

Matador: an Earnings All-Star

Matador Resources has done something over the last 5 years that few companies have done: it has beat the Zacks Consensus on earnings every quarter.

It has a perfect earnings surprise track record.

While that would be impressive for any company, given the pandemic which hit in 2020 and shut the global economy, it is even more so for an oil producer as oil went negative in 2020 and the industry was in a dark place.

Analysts Are Cutting Matador’s Earnings Estimates for 2024 and 2025

The price of WTI crude has fallen in 2024 and, along with it, so has Matador’s share price. Here’s a 3-month chart with the two overlapped and they are moving in tandem.

Matador Resources is unhedged, which means that its earnings will be determined by the movements of oil, up or down.

Currently, with oil having weakened, even falling under $70 recently, the analysts have gotten bearish.

3 estimates have been cut for 2024 in the last 30 days and 4 estimates have been cut for 2025.

As a result, the 2024 Zacks Consensus Estimate has fallen to $7.40 from $7.83 over the last month. But that is still earnings growth of 9.3% compared to 2023 when Matador made just $6.77.

The 2025 Zacks Consensus has also fallen sharply, to $8.03 from $9.41 just 30 days ago.

Matador: a Value Stock

Even with the earnings estimate cuts, Matador remains a cheap stock on a price-to-earnings basis because the shares have fallen as well.

Matador shares are down 4.7% year-to-date. It has a forward P/E of just 7.2.

It also has an attractive price-to-book (P/B) ratio of just 1.4. A P/B ratio under 3.0 usually indicates value.

Matador is also shareholder friendly and pays a dividend, currently yielding 1.5%.

Matador is set to report earnings again on Oct 22, 2024. Will it beat again and keep its earnings surprise steak alive?

Investors might want to wait on the sidelines until they find out.

Additional content:

 

3 Key Stocks Leading the Energy Transition Race: EQNR, SHEL, ENB

Global economies are progressively shifting toward cleaner energy sources, and energy companies are facing growing pressure to address climate change from various angles. While most analysts agree that renewable energy will play a significant role in meeting future energy demands, it is unlikely to eliminate the need for oil and natural gas entirely. Fossil fuel demand is expected to continue growing, albeit at a slower rate.

The U.S. Energy Information Administration, in its Annual Energy Outlook 2023, stated that through 2050, renewables will increasingly match power demand. Thus, there are abundant opportunities for energy companies with a footprint in oil and gas resources or transporting commodities and the renewable energy space.

Three such companies are Equinor ASA, Shell plc and Enbridge Inc. Thus, investors should keep an eye on these leading energy companies as they are well poised to gain in the long run.

3 Stocks to Gain: EQNR, SHEL, ENB

Equinor, Norway's energy giant, is actively diversifying its portfolio with a strong focus on offshore wind, carbon capture and hydrogen. The company is leading several major offshore wind projects across Europe and the United States, positioning itself at the forefront of the renewable energy sector. By 2050, the integrated energy major aims to balance the amount of greenhouse gases it emits with the amount it removes from the atmosphere.

Shell also has the same ambitious target of becoming a net-zero emissions energy player by 2050 or earlier. By 2030, the integrated energy company plans to lower absolute emissions by 50%.

While providing energy to millions of people, Enbridge is adapting extremely well to the energy transition. From its diverse business, the company is expecting to achieve net zero emissions by 2050.

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