RLX Technology (NYSE:RLX) & Funko (NASDAQ:FNKO) Critical Review

RLX Technology (NYSE:RLX) and Funko (NASDAQ:FNKO) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, valuation, institutional ownership and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for RLX Technology and Funko, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLX Technology	0	2	0	0	2.00
Funko	1	1	1	0	2.00

RLX Technology currently has a consensus price target of $2.50, indicating a potential upside of 34.77%. Funko has a consensus price target of $6.50, indicating a potential upside of 18.61%. Given RLX Technology’s higher possible upside, equities analysts plainly believe RLX Technology is more favorable than Funko.

Institutional & Insider Ownership

22.7% of RLX Technology shares are owned by institutional investors. Comparatively, 99.2% of Funko shares are owned by institutional investors. 53.4% of RLX Technology shares are owned by insiders. Comparatively, 3.3% of Funko shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares RLX Technology and Funko”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLX Technology	$4.38 billion	0.66	$131.83 million	$0.10	18.55
Funko	$918.39 million	0.33	-$67.36 million	($1.05)	-5.22

RLX Technology has higher revenue and earnings than Funko. Funko is trading at a lower price-to-earnings ratio than RLX Technology, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

RLX Technology has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Funko has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Profitability

This table compares RLX Technology and Funko’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLX Technology	20.76%	6.15%	5.60%
Funko	-6.30%	-21.03%	-5.61%

Summary

RLX Technology beats Funko on 11 of the 13 factors compared between the two stocks.

About RLX Technology

RLX Technology Inc., together with its subsidiaries, engages in the manufacture and sale of e-vapor products in the People's Republic of China and internationally. It serves partner distributors and retail outlets. The company was founded in 2018 and is headquartered in Beijing, China.

About Funko

Funko, Inc., a pop culture consumer products company, designs, sources, and distributes licensed pop culture products in the United States, Europe, and internationally. The company provides 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, books, games, and other collectibles. It markets its products under the Pop!, Loungefly, Funko, Mystery Minis, Bitty Pop!, Funko action figures, Funko Plush, and Funko Soda brand names; 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. Funko, Inc. was incorporated in 2017 and is headquartered in Everett, Washington.