There’s a new SPAC strutting its stuff about town. In February, Playboy (PLBY) returned to the public markets for the first time since 2011 via the blank check route, and after a limp start, the stock has been shooting upwards.
The iconic adult-oriented brand stopped publishing its fabled magazine last year, the final issue coming out at the end of a decade long transition. In fact, Canaccord analyst Austin Moldow says investors should leave preconceptions of what Playboy is – or used to be – at the door and consider the “opportunity to hop on an undervalued global brand.”
“Investors should forget what they think they knew about the business model,” the analyst said. “It is not a media company, rather it is a pleasure and lifestyle company centered on consumer products. Those products are monetized predominantly through licensing and a growing portion of direct-to-consumer e-commerce sales. Almost all media operations were wound down, including the print business. Now it’s really not about the articles.”
Interestingly, Moldow thinks the Playboy brand is fitting to these times and believes its “core mission of self-expression and sexual freedom” will resonate with a younger demographic.
But not just the young. While Moldow thinks the company will need to find the right balance to connect its history to its modern ambitions, he expects Playboy to appeal to a “wide array of investors.” It doesn’t hurt that the global brand boasts “several growth prospects” and a massive TAM (total addressable market), either.
“We expect this to be a company of solid execution and beats and raises that cause upward estimate revisions over time,” Moldow summed up.
Moldow has a Buy rating on PLBY shares backed by a $28 price target. PLBY stock has surged by 145% over the past month, and now sits near Moldow’s objective. (To watch Moldow’s track record, click here)
Craig Hallum’s Alex Fuhrman, on the other hand, thinks the stock has a way to run still. The analyst also rates PLBY a Buy, but his $35 price target implies shares could add an extra 16% of fizz. (To watch Fuhrman’s track record, click here)
Furhman highlights PLBY’s very on-trend pivot toward the NFT space as another reason why investors should get on board. The company recently said there could be a big opportunity selling its “vast trove of content” as NFTs (non-fungible tokens).
“Imagine what some collectors might pay for unpublished, irreplaceable photographs of Marilyn Monroe, Farrah Fawcett, or Madonna, and then consider how many such images Playboy must own from more than half a century publishing the iconic print magazine,” Furhman said.
While the company hasn’t included this opportunity in its current forecasts, Furhman expects Playboy “to share more on this front in the coming weeks or months.”
One other analyst has joined the Playboy bull club and with 3 Buys, the stock qualifies with a Strong Buy consensus rating. However, the average price target of $29.67 represents a modest downside. It will be interesting to see whether the analysts downgrade their ratings or upgrade price targets over the coming months. (See PLBY stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.