What happened

Left for dead by a great many investors late last week, Funko (FNKO -1.27%) stock experienced quite the revival on Monday. Shares of the POP! collectibles purveyor leaped nearly 30% higher on the day as bargain seekers piled into the company anew.

So what

Funko had an awful Friday, with its shares plummeting a scary 59% after the company reported its third-quarter earnings. The highly specialized consumer goods company missed badly on its bottom line, an unforgivable sin for many investors.

In an even worse transgression, Funko made downward adjustments in guidance for both the entirety of 2022 and its current (fourth) quarter; uncomfortably, this is the quarter in which the winter holidays fall. 

But did the company really deserve such severe punishment from Mr. Market? Sure, that net profit came in well below expectations, and few investors feel joy when a company lowers guidance. However, Funko did manage to increase its revenue by 37% (to almost $366 million), which is a feat for any company in any economic sector.

Now what

And while Funko will probably net lower profits than formerly expected, the company is still forecasting that it'll continue to land in the black. 

Because of the nature of its product lineup, it's a very trend-linked company and stock, to be sure. It's also heavily dependent on consumer discretionary spending as a maker of winsome collectibles; since the latest macroeconomic news and forecasts have generally been gloomy, this compounded the earnings miss.

Investors tend to overreact to news both good and bad, however, and on Monday it was obvious that many thought Friday's reaction to Funko's latest quarter was overblown. We'll see if those returning bulls will remain optimistic about the stock, particularly now that we're barreling into the holiday season.