We recently started a series called “Penny Stock of the Day”. These ideas are geared towards traders with an extremely high risk appetite.

Our Penny Stock of the Day is chosen by screening for stocks under $5 and then applying technical analysis on the shortlisted set of penny stocks showing unusual volume. When making these trades, please make sure to pay vigilant attention to pricing moves and have a strict stop loss in place to avoid significant losses.

Penny Stock of the Day: Funko, Inc. (NASDAQ: FNKO)

Today’s penny stock pick is the pop culture consumer products company, Funko, Inc. (NASDAQ: FNKO).

Funko, Inc. designs, manufactures, and markets licensed pop culture products in the United States, Europe, and internationally. It offers 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, apparel, books, games, and other collectibles.

The company markets its products under the Pop!, Loungefly, Funko, Mystery Minis, Bitty Pop!, Funko action figures, Funko Plush, and Funko Soda brands; 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.

Website:  https://www.funko.com/

Latest 10-K report:  https://d18rn0p25nwr6d.cloudfront.net/CIK-0001704711/1b3bcab2-d8f7-47bf-80fa-fd4c4916511e.pdf

Analyst Consensus: As per TipRanks Analytics, based on 2 Wall Street analysts offering 12-month price targets for FNKO in the last 3 months, the stock has an average price target of $3.50.

Analysts | Source: TipRanks.com

Potential Catalysts / Reasons for the Hype:

  • The company is rumored to be pivoting toward digital-first, influencer-driven marketing with the recent appointment of Josh Simon (formerly Netflix VP of Consumer Products) as CEO and Reed Duchscher (CEO of Night Inc., manager of MrBeast) to the Board of Directors.
  • Funko is moving toward higher-margin, exclusive “Premium Blind Boxes” and limited-edition collaborations.
  • The company also has a strong pipeline of new releases (60+ Pops, artist collaborations)

On analyzing the company’s stock charts, there seem to be multiple bullish indications…

Bullish Indications

#1 Symmetrical Triangle Pattern: The daily chart shows that the stock has currently formed a symmetrical triangle pattern, which is marked as purple color lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper trend line occurs, it usually signifies the start of a new bullish trend.

FNKO – Daily Chart

#2 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line is above the -DI line, and the ADX line is currently moving higher from below the +DI and -DI lines.

#3 Price above MAs: The stock is currently above its 50-day as well as 200-day SMA, indicating that the bulls have currently gained control.

#4 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.

#5 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as a pink color dotted line. This looks like a good area for the stock to move higher.

FNKO – Weekly Chart

#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.

Recommended Trade (based on the charts)

Buy Levels: If you want to get in on this trade, the ideal buy level for FNKO is above the price of $3.80.

Target Prices: Our first target is $5.00. If it closes above that level, the second target price is $6.00.

Stop Loss: To limit risk, place a stop loss at $3.10. Note that the stop loss is on a closing basis.

Our target potential upside is 32% to 58%.

For a risk of $0.70, our first target reward is $1.20, and the second target reward is $2.20. This is a nearly 1:2 and 1:3 risk-reward trade.

In other words, this trade offers 2x to 3x more potential upside than downside.

Potential Risks / Red Flags:

  1. The company has a history of net losses.

    FNKO – Consolidated Statements of Operations

  2. Rumors of license losses, like the survival horror video game & film franchise, Five Nights at Freddy’s (FNAF) to competitors like Jazwares. This could lead to reduced product diversity and market share erosion.
  3. Corporate Insiders placed Informative Sells of Shares Worth $135.6K in the Last 3 Months.

    Insiders | Source: TipRanks.com

  4. There is stingier spending amid affordability concerns, with headwinds like tariffs impacting supply chains, heightened risks from macro factors, and potential dilution.
  5. The company has ongoing legal proceedings like Shumacher v. Mariotti et al. (fiduciary breach, discovery active); Student/Construction Laborers Pension Trust v. Funko (Exchange Act violations, on appeal); unnamed CA wage/hour class action (mediation May 2025). FNKO had settled stockholder derivative suits (Cassella/Evans/Igelido v. Mariotti et al., consolidated as In re Funko, Inc. Derivative Litigation; Smith/Fletcher v. Mariotti et al.; Silverberg v. Mariotti et al.). IPO-related class actions (In re Funko, Inc. Securities Litigation) were settled in 2025 for $14.75M.
  6. Despite being a loss-making company, the executives are being paid significant compensation.

    FNKO – Executive Compensation

As you can see, today’s featured penny stock offers big upside potential… but it also comes with a number of risks and red flags. As always, when dealing with penny stocks, we advise caution before entering into such high-risk ventures. Remember to think before you trade… understand the risks… and if you decide to trade, stick to your stop-losses!

Happy Trading!

Trades of the Day Research Team

READ BEFORE TRADING PENNY STOCKS: The allure of penny stocks lies in their potential to deliver massive gains in a short period of time. However, in exchange for that opportunity, most penny stocks carry tremendous risk. They can be extremely volatile and are susceptible to “pump and dump” schemes and fraud.

Unlike regular stocks, the financial condition of most penny stock companies can be extremely difficult to analyze, as the majority of such stocks are traded on over-the-counter (OTC) exchanges, which are typically less transparent and less regulated than the major exchanges. In fact, in the penny stock space, it’s often easier to spot warning signs and red flags than it is to identify a sound investment. Nevertheless, we do our best to identify short-term trade opportunities in this exciting space because we know some of our readers are looking for high-risk, high-reward ideas. We just urge you to make sure you fully understand the risks before making any of these trades.

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