Pop Mart shares tank as Labubu doll hype vanishes, $13 billion gone in flash - what's the outlook?

Pop Mart stock outlook 2025: Pop Mart International Group Ltd, the Chinese toymaker behind the once-hyped-up Labubu dolls, has seen its stock rally come to a sudden halt, wiping out nearly $13 billion in value in a matter of weeks, as per a report.

Why Pop Mart’s Stock Rally Suddenly Stalled

Once riding high on a wave of enthusiasm that made it one of the best-performing stocks on the Hang Seng Index, Pop Mart’s shares plunged almost 9% in Hong Kong trading, marking the firm's steepest drop since April, as per a Bloomberg report.

JPMorgan Downgrades Pop Mart: Is the Stock Overvalued?

The sudden slide follows a downgrade by JPMorgan Chase & Co., whose analysts warned that Pop Mart’s valuation “is priced for perfection,” as quoted by Bloomberg. JPMorgan analyst Kevin Yinny wrote that, " Any small fundamental miss/negative media reports (i.e. resale price drop and third-party licensing) might drive underperformance,” as quoted in the report.


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Labubu Dolls Losing Popularity in Secondary Markets

The bank highlighted growing concerns over weakening catalysts and a narrowing premium for Labubu dolls in China’s secondary markets, a sign that its previously massive demand may be cooling off, according to the report.

Labubu dolls, the firm's rabbit-eared plush dolls, had become a cultural phenomenon, which was even endorsed by K-pop star Lisa of BlackPink and football legend David Beckham, among others, as per the Bloomberg report. But now, the hype is fading, and prices for these plush collectible dolls are dropping, dampening investor enthusiasm, according to the report.

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Pop Mart’s Stock Soared 180% This Year Despite Recent Drop

Despite the recent setback, Pop Mart’s shares have surged over 180% this year, fueled by the Labubu craze that swept through Asian markets, as per the Bloomberg report. The company also remains the top performer on the Hang Seng Index.

However, Pop Mart’s stock also witnessed a sharp drawdown, as it lost about $13 billion or nearly a quarter of its value, since reaching a record on August 26, as per the Bloomberg report. The stock has more than quadrupled in 2024 as Labubu has gained popularity, and was added to the Hang Seng Index and the Hang Seng China Enterprises Index this month, as per the report. Pop Mart’s shares are trading at about 23 times their 12-month forward earnings estimate, as reported by Bloomberg.

What’s Next for Pop Mart? New Labubu Versions and Interactive Toys

Looking ahead, Pop Mart plans to launch a new version of Labubu and roll out animation and interactive toys before Christmas, but JPMorgan describes these efforts as “low visibility” catalysts, as reported by Bloomberg. As a result, the bank downgraded Pop Mart’s rating from overweight to neutral and slashed its price target by 25% to HK$300, as per the report.

Investor Sentiment Shifts as Buy Ratings Decline

Investor sentiment appears to be shifting as the ratio of buy ratings on Pop Mart has fallen to its lowest in a year, dropping 91%, reflecting growing uncertainty about the company’s next steps, as per Bloomberg.

FAQs

Why did Pop Mart’s stock drop?
Pop Mart’s stock fell mainly due to a downgrade from JPMorgan, concerns about the doll craze cooling off, and the company’s high valuation being seen as too optimistic.

What are Labubu dolls?
Labubu dolls are collectible plush toys with signature rabbit ears that became hugely popular, especially in China and parts of Asia.