This year has seen a surge in investor interest in non-fungible tokens (NFT), with many spending large sums of money on artwork and other digital collectibles. NFTs are a form of digital asset used to demonstrate ownership of a one-of-a-kind virtual object, such as online pictures and videos or even sports trading cards. The phenomenon exploded when digital designer Beeple’s digital collage was sold for a record  $69 million by Christie’s in March.

According to blockchain sales tracking company DappRadar, NFT sales spiked 111.5% sequentially in the second quarter. As NFTs grow in popularity, companies exposed to NFTs are witnessing a huge surge in their share prices. And as virtual reality technology progresses, NFT enthusiasts will likely spend more time and money in virtual environments, which is expected  to drive the digital collectibles craze in the foreseeable future.

As such, Wall Street analysts expect financially sound NFT stocks PLBY Group Inc. (PLBY) and Dolphin Entertainment Inc. (DLPN) to generate significant momentum in the coming months. So, these two stocks could be solid picks now.

PLBY Group Inc. (PLBY)

PLBY is a global pleasure and leisure corporation. The company is divided into three operational segments: Licensing; Direct-to-Consumer; and Digital Subscriptions and Content. It offers  products under its flagship brand, Playboy. The company also sells lifestyle, beauty, and grooming products for men and women.

This month, PLBY announced the expansion of its consumer products and lifestyle business in India through a collaboration with Jay Jay Capital and Investments, a major India-based investment company and brand operator. The new collaboration will offer PLBY’s hospitality experiences in key Indian metropolises, with the first flagship site set to debut in December 2021.

Also, this month, PLBY completed its acquisition of Honey Birdette, an Australia-based fast-growing premium lingerie and lifestyle brand. The acquisition is projected to expand the company’s product portfolio and accelerate its business growth.

PLBY’s revenue increased 44.3% year-over-year to $49.85 million in the second quarter, ended June 30, 2021. Its cash and cash equivalents surged significantly from their year-ago value to $255.53 million. The company reported $8.92  million in net income, while its EPS amounted to $0.24 over this period.

The company’s EPS is expected to grow 102.8% in the current year to $0.04. In addition, analysts expect PLBY’s revenue to increase 57.8% year-over-year to $232.94 million in its fiscal year 2021. The stock has gained 18.3% over the past month and 41.2% over the past nine months.

All three Wall Street analysts that have provided ratings for the stock rated it Buy. Closing yesterday’s trading session at $21.13, the $48.67 average analyst price target represents a potential 130.3% upside.

Dolphin Entertainment Inc. (DLPN)

DLPN and its subsidiaries operate as independent entertainment marketing and premium content production companies. Entertainment public relations and marketing and content production are the company’s two business segments. In addition,  it provides strategic marketing and public relations services to individuals and corporations in the entertainment, hotel, and music industries.

This month, DLPN and West Realm Shire Services Inc., the owner and operator of FTX.US, formed a collaboration to build large-scale, consumer facing NFT markets for major sports and entertainment companies. The partnership should  enable DLPN to provide a seamless experience to its customers and further boost its revenue.

During the second quarter, ended June 30, 2021, DLPN’s revenue increased 66.4% year-over-year to $8.64 million. The company reported $56,290 in  operating income , compared to a $179,040 operating loss in the prior-year quarter. Its net income came in at $1.35 million for this period, compared to a $2.94 million net loss in the second quarter of 2020. Its EPS was  $0.13, versus a $0.62 loss  per share in the prior-year period.

DLPN is expected to generate 25.8%  revenue growth in the current year. Its EPS is estimated to increase 150.5% year-over-year to $0.55 in its fiscal year 2022. DLPN’s stock has gained 116.2% over the past year and 195.9% over the past nine months.

The sole  Wall Street analyst that has provided a rating for the stock rated it a Buy. Currently trading at $10.13, the $30 average analyst price target represents a 196.2% potential upside.

PLBY shares were trading at $21.38 per share on Thursday morning, up $0.25 (+1.18%). Year-to-date, PLBY has gained 103.43%, versus a 18.34% 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...

More Resources for the Stocks in this Article