Pleasure and leisure lifestyle company PLBY Group, Inc. (PLBY) operates in four categories: Sexual Wellness, Style & Apparel, Gaming & Lifestyle, and Beauty & Grooming.
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The owner of Playboy, one of the most iconic brands across the globe, recently delivered mixed Q2 numbers, with revenue ahead of consensus, but earnings short of estimates.
Let’s take a look at its financial performance, as well as what has changed in its key risk factors that investors should be aware of. (See PLBY stock charts on TipRanks)
On the back of growth in direct-to-consumer and licensing revenues, PLBY’s top-line grew 44% year-over-year to $49.9 million, outperforming consensus by $3 million.
Ben Kohn, CEO of PLBY Group, said, “On the direct-to-consumer side, we saw great traction on Playboy.com with expanded merchandise offerings and strategic influencer marketing.
“In addition, the second quarter marked continued strong performance in our licensing business and our entry into blockchain-powered offerings with our first NFT collection.”
Higher cost of sales, coupled with higher Selling and Administrative expenses, resulted in net loss per share widening to $0.24, from a net loss per share of $0.16 a year ago. This figure was wider than the estimated net loss per share of $0.01 for Q2.
On August 11, Roth Capital analyst George Kelly reiterated a Buy rating on the stock, but decreased the price target to $45 from $55. The analyst highlighted that PLBY’s Q2 demonstrated progress on key development initiatives, and that the momentum of the Playboy brand continues.
Based on three unanimous Buys, consensus on the Street is a Strong Buy. The average PLBY Group price target of $48.67 implies 100.7% potential upside for the stock.
Now, let’s have a look at what’s changed in the company’s key risk factors profile.
According to the new TipRanks Risk Factors tool, PLBY Group’s main risk categories are Finance & Corporate, and Ability to Sell, accounting for 39% and 27% respectively, of the total 64 risks identified. Since June, the company has added two key risk factors under the Finance & Corporate category.
PLBY Group is a party to agreements and instruments where obligations are calculated in association with Libor. The publication of USD Libor is expected to cease after June 2023 and alternative benchmarks may replace it, affecting PLBY’s agreements.
PLBY Group also noted that it is exploring digital assets and cryptocurrencies. Technologies such as blockchain and non-fungible tokens (NFTs) are new and evolving. As these technologies get widespread, it becomes necessary for PLBY to adapt to them.
A failure to explore these trends and apply them to its products may impact PLBY adversely. The laws and regulations regulating these technologies are continually evolving and uncertain. Regulations on this front may negatively impact PLBY Group in the future.
The sector average Finance & Corporate risk factor is 37%. Despite a recent downtrend, shares are up 146% over the past 12 months.
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