FNKO - Funko slides after Goldman Sachs pulls bull rating

Goldman Sachs dropped its rating on Funko ( NASDAQ: FNKO ) on Wednesday on concerns over the growth track for the toy company.

The firm now has Funko ( FNKO ) slotted with a Neutral rating after having it set previously at Buy.

Analyst Stephen Laszczyk and team see Funko ( FNKO ) as well-positioned due the company's broad portfolio of licensed toys, but think margin headwinds and the loss of key licenses could make reaching expectations difficult. In particular, the aggressive earnings growth target of approximately 50% is seen as potentially being out of reach.

"In order to achieve this, Funko, in our view, will need to successfully execute against a relatively complex series of initiatives, including extending current products lines, expanding into new product categories, building a larger retail presence in international markets, scaling a direct-to-consumer platform, and executing against implementing new and more efficient distribution systems."

Goldman Sachs sees downside risk for Funk ( FNKO ) hitting consensus estimates. The firm set a lowly price target of $8.50.

Shares of Funk ( FNK ) fell 5.54% premarket to $11.43.

The Seeking Alpha Quant Rating on Funko ( FNKO ) is flashing Strong Sell.

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