Non-fungible tokens (NFT) are digital assets that represent various tangible and/or intangible objects, such as collectible sports cards, virtual real estate, and even digital sneakers. Digital tokens have sparked an explosion of interest among investors this year, with enthusiasts splurging on artwork and other digital products. NFT sales volumes hit $1.9 billion in August, more than 10 times March’s $148 million, on trading platform OpenSea.
The NFT market is undoubtedly here to stay as it adapts to the creative inclinations of a new digital generation, fueled by the COVID-19 pandemic and an influx of easy-to-use and cost-efficient NFT minting platforms, protocols, and markets, and growing demand from the gaming sector. According to MarketsandMarkets, the global blockchain market is expected to reach $39.7 billion by 2025, registering a 67.3% CAGR.
Given that the NFT hype is grabbing the attention of increasing numbers of investors, Wall Street analysts expect NFT stocks Funko Inc. (FNKO), Cinedigm Corp. (CIDM), and Jiayin Group Inc. (JFIN) to rally by more than 40% in price in the coming months.
Funko Inc. (FNKO)
FNKO creates, sources, and sells licensed pop culture merchandise in the United States, Europe, and internationally. The Lynnwood, Wash.-based concern offers its products under the Pop!, Loungefly, Mystery Minis, Paka Paka, Funko Soda, and Snapsies brand names, and licenses its properties under the classic evergreen movie release, current TV, and current video game categories.
Last month, with fresh additions to its already comprehensive holiday collection, FNKO announced its entry into the festive aisle. The company is releasing Pop!-inspired Hallmark ornaments and wrapping paper this holiday season, which will be available exclusively at Walmart Inc. (WMT).
FNKO’s revenue increased 140.7% year-over-year to $236.11 million in the second quarter, ended June 30, 2021. The company reported an operating income of $27.29 million, compared to a $14.26 million operating loss in the prior-year quarter. Its net income was $13.81 million for this period, versus a $10.59 million net loss in the first quarter of 2020. The company’s EPS came in at $0.34, compared to a $0.30 loss per share in the prior-year period.
FNKO’s EPS is expected to increase 210.8% in the current year. A $923.69 million consensus revenue estimate for its fiscal year 2021 represents a 41.6% increase from the same period last year. The stock has gained 231.2% in price over the past year and 120.2% over the past nine months.
Two Wall Street analysts that have provided ratings for the stock rated it Buy. Closing yesterday’s trading session at $19.7, the $28.5 average analyst price target represents a potential 44.7% upside.
Cinedigm Corp. (CIDM)
CIDM, which is based in New York City, is a distributor and aggregator of independent movie, television, and other short-form content in the United States, Canada, and New Zealand. Cinema Equipment; and Media Content and Entertainment are the company’s two operational segments. In addition, the company runs Docurama, CONtv, Dove Channel, Viewster Anime, Fender, and Screambox, and Matchpoint, a software-as-a-service platform for automating the distribution of streaming content and OTT channels.
Last month, CIDM made four of its newest channels available on The Roku Channel, the home of free and premium entertainment. In addition, the company intends to create destinations that immerse viewers in their favorite content, while remaining technologically advanced as the streaming industry continues to evolve.
Also, last month, CIDM announced a contract to launch The Only Way Is Essex (TOWIE) channel in partnership with All3Media International. The service will be offered in the United States and Canada via connected TVs, digital set-top boxes, media-streaming devices, and the web for linear and AVOD platforms.
In its first fiscal quarter, ended June 30, 2021, CIDM’s revenue increased 149% year-over-year to $15 billion. Its net income came in at $5 million for this period, compared to a $19.9 million net loss in the first quarter of 2020. In addition, the company’s EPS came in at $0.03, versus a $0.21 loss per share in the prior-year period.
The company’s EPS is expected to grow 67.3% in the current year. Analysts expect CIDM’s revenue to increase 41.3% year-over-year to $44.41 million in its fiscal year 2021. The stock has gained 163.3% in price over the past year and 222.6% year-to-date.
Two Street analysts that have provided ratings for the stock rated it Buy. The $3.38 consensus price target represents a 69% potential gain from its last closing price of $2.
Jiayin Group Inc. (JFIN)
Headquartered in Shanghai, China, JFIN is a Chinese online personal finance platform that connects individual investors and borrowers. It provides a safe and open platform that allows investors and borrowers to interact transparently, securely, and quickly.
During the second quarter, ended June 30, 2021, JFIN’s revenue increased 100.9% year-over-year to ¥492.17 million ($76.23 million). Its operating income grew 211.5% from the year-ago value to ¥149.61 million ($23.17 million), while its net income surged 208.5% year-over-year to ¥126.84 million ($19.65 million) over this period. The company’s EPS increased 210.5% from the year-ago value to ¥0.59 ($0.09).
JFIN is expected to witness 956% revenue growth in the current year. Its EPS is estimated to increase 760.3% year-over-year to $6.28 in the current year. JFIN’s stock has gained 18.9% in price over the past year and 46.2% so far this year.
The only Wall Street analyst that has provided a rating for the stock rated it a Buy. Currently trading at $4.33, the $10.4 average analyst price target represents a 140.2% potential upside.
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FNKO shares rose $0.05 (+0.25%) in premarket trading Friday. Year-to-date, FNKO has gained 90.27%, versus a 21.98% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...
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