Analyst Warns Pop Mart's Labubu Hype Cycle Echoes Beanie Baby Bubble, Shares Plunge More Than 30%

Growing excitement around Pop Mart International Group Ltd.’s Labubu figurines is increasingly taking on the characteristics of a speculative craze, echoing the dynamics that eventually derailed the Beanie Baby boom of the 1990s, according to the sole analyst on the Street who currently assigns the stock a negative rating.

Bernstein’s Melinda Hu, who focuses on consumer companies across Asia from her base in Hong Kong, believes the frenzy surrounding the sharp-toothed toy line may be nearing its peak. She argues that uncertainty over what Pop Mart’s next major hit will be limits the stock’s potential in the near term. Hu, who maintains an underperform view, says the elements fueling Labubu’s popularity—its engineered scarcity, the collect-and-chase dynamic, the excitement of blind-box purchases, and a hot resale market—mirror the behaviors that inflated other short-lived collectible manias. She advises long-horizon investors to stay cautious unless the company demonstrates more durable shifts in its strategy.

Pop Mart’s share price already reflects the mounting skepticism. The stock has fallen more than 30% from its August high, unwinding part of an explosive rally that drove gains of over 1,500% from early last year to its summer peak. The company’s strong third-quarter results were not enough to reassure investors; the stock dropped over 9% on October 23 as concerns about growth momentum through 2026 persisted.

A major point of contention is the company’s increasing reliance on a single intellectual property. The Monsters series—home to Labubu—made up 35% of first-half revenue, up sharply from 14% the year before. Whether Pop Mart can broaden its portfolio and reduce this concentration risk sits at the center of the debate between bulls and bears. Bernstein forecasts revenue growth to crest around 145% this year but expects profitability to come under pressure as the company allocates more spending to marketing and global outreach to maintain interest in its franchises.

Market positioning reflects some of the skepticism. Short interest rose to 2.8% of free float as of Thursday, the highest reading since April 2024.

Even so, most analysts remain positive. Of the 46 covering the stock, 42 still recommend buying it, while three advise holding it. Supportive analysts point to the company’s early-stage push into overseas markets and its efforts to diversify its intellectual properties. Morgan Stanley, for example, argues that investors underestimate the company’s plans to extend the lifespan of its brands through new entertainment formats such as themed attractions, filmed content, and celebrity tie-ins.

JPMorgan sees additional potential in the “Twinkle Twinkle” star-themed line. Analyst Kevin Yin expects it to generate roughly 8% of company sales by 2027, up from 2.8% in the first half of this year. Hu, however, remains doubtful that Pop Mart’s other franchises can reliably stand on their own. She also rejects comparisons between Labubu and evergreen cultural icons like Barbie or Hello Kitty, noting that those brands achieved staying power through constant availability—not through the scarcity-based mechanics that currently underpin Labubu’s appeal.