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PLBY Stock: Playboy Turns To Social Media, NFT And Metaverse

PLBY Group stock has been trending on the main online discussion boards. The Playboy franchise is looking to differentiate not only for its iconic brand, but also for the investment opportunities.

PLBY Group, born of founder Hugh Hefner’s Playboy Enterprise, went public via SPAC (special purpose acquisition company) in February 2021. The company licenses the Playboy brand, sells third-party products and digital subscriptions.

Figure 1: PLBY Group stock when listed on Nasdaq.

Figure 1: PLBY Group stock when listed on Nasdaq.

Beyond the company’s iconic brand, some see exciting business opportunities ahead. Here is an overview of PLBY stock  (PLBY) - Get PLBY Group, Inc. Report and the company’s growth potential.

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The Playboy brand

PBLY Group’s most important asset is arguably its well-recognized name. Playboy is one of the top 20 most licensed brands globally. The brand has recently helped the company to beat revenue estimates on the back of brand licensing and direct-to-consumer membership services.

PBLY seems to understand what it can achieve by leveraging its iconic status. Well beyond magazines sitting on shelves at the newsstand, the company has been venturing out into the world of social media, metaverse and NFTs. And herein lies the opportunity for investors.

Centerfold: Playboy’s own social media

Centerfold is PLBY’s social media-like platform to be launched on December 4. This will be a public square for Playboy fans to interact and for PBLY to monetize. Centerfold is expected to be an OnlyFans competitor, another subscription service “only for fans”.

PLBY’s Centerfold aligns with the company’s plans to run a recurring revenue business model. As a potential source of hefty and steady cash flows, subscriptions can eventually help PBLY stock to earn better valuations.

Centerfold is set to launch ahead of the original second half of 2022 timeline. CEO Ben Kohn has credited the acquisition of Dream as a key launch catalyst:

“Our recent acquisition of the Dream platform, and its technology team, will accelerate our timeline to market, and provide crucial in-house development resources to help us scale quickly.”

PBLY’s challenge now is to ensure that Centerfold lives up to expectations. Rapper and celebrity Cardi B will be Centerfold’s Creative Director, as hype around her name will likely attract more fans to join the platform.

NFT and Metaverse opportunities

PLBY stock is also in the spotlight for its efforts in NFT (e.g. Rabbitars) and metaverse (e.g. Playboy Mansion). The former are digital art pieces of cartoon bunnies stored on the Ethereum blockchain.

Figure 2: The Playboy Rabbitars non-fungible rabbits inspired by Playboy iconography, heritage and lore.

Figure 2: The Playboy Rabbitars non-fungible rabbits inspired by Playboy iconography, heritage and lore.

The latter is a digital environment in which users participate in real-life and virtual events inside the Playboy Mansion metaverse. PLBY Group’s CEO recently discussed the project during a Forbes interview:

“In the metaverse or virtual Playboy Mansion, we can reach an audience on a global basis and we can do that by selling different tiers of membership. I believe consumers today want a lifestyle, they want to go have fun in their lives, especially after two years of being locked down in their homes.

PLBY seems to be trying to capitalize on the metaverse’s appealing growth potential. This market’s size is estimated at $47 billion in 2020, and is expected to grow to $828 billion in 2028 at a CAGR of 27%.

So, is PLBY a buy?

According to experts, it is. Three analysts have shared their ratings on PLBY stock in the past few weeks. The consensus is a strong buy with average share price target of $48, implying 40%-plus gains ahead.

Loop Capital’s Daniel Adam sees PLBY’s NFTs as a "testament to the massive opportunity”. He notes that PLBY sold out of its $9 million Rabbitars within hours after launch.

Cannacord Genuity’s Austin Moldow also likes the stock, especially given direct-to-consumer revenue growth of 193% YoY that accelerated from 88% in Q2. Despite maintaining his buy recommendation, the analyst lowered his price target slightly due to supply chain disruptions during the holiday season.

In our view, PLBY stock could be a buy for growth-biased investors seeking exposure to “hot” themes like NFT and metaverse. They should keep in mind, however, that PLBY Group is still a year or two away from turning a net profit, following the recent IPO and acquisition costs.

PBLY shares currently trade at an eye-popping 2022 P/E of 102 times. However, if the company delivers on revenue and EPS growth, the high valuation multiples can eventually be justified.

Is the price right?

Looking at a company’s business fundamentals is only half the work needed to find a good stock. How much one pays to own the shares is a key factor in the success of any investment. This is why valuation analysis is so important.

Alpha Spread’s user-friendly platform allows you to estimate a stock’s fair value –through valuation multiples, discounted cash flow, and more. I believe that the service is a must for anyone looking to own the right stock at the right price. Check out alphaspread.com and get started with a 7-day free trial.

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)