Playboy's stock soared 15%. Why do investors like the company's new strategy?

Shares of Playboy, the publisher of the once-popular magazine of the same name, surged more than 15% on the Nasdaq on August 11, bringing its market capitalization to $162.9 million. A shift in strategy, in which the company focused on licensing and lingerie sales, allowed it to return to profitability.

Shares of Playboy, which had long been struggling with losses, rose by more than 15% during trading on August 11. In the second quarter, the company managed to return to profitability: net income totaled approximately $200,000, compared with a loss of $7.7 million in the same period of 2025. Adjusted EBITDA doubled to $7 million. It has been positive for the sixth consecutive quarter, said Playboy CEO Ben Kon.

Revenue for the reporting period rose 11% year-over-year to $31.2 million.

The company attributed the trend to the effectiveness of its new strategy, which, among other things, calls for aggressive brand promotion and cost cuts, according to Investing.com.

In premarket trading on August 12, prices fell by about 2.4%.

Playboy has essentially transformed from a media empire focused on print magazines into a licensing company with a growing lingerie retail division, according to the Seeking Alpha website. It now generates revenue by selling other companies the right to use its brand and the rabbit-head logo.

For example, Playboy has a brand licensing agreement with Thai Nippon Rubber Industry Public for the production of condoms and lubricants, and with Sunny Cusco for the production and sale of clothing. In 2026, Playboy sold half of its Chinese business to local player United Trademarks Group for $122 million—to expand into the Asian market.

However, the company says that the main driver of revenue growth in the second quarter was the “consistently strong” performance of the Honey Birdette lingerie brand, which it acquired in 2021 for $330 million.

Playboy was founded by Hugh Hefner in 1953. Initially, the company published the magazine of the same name, aimed at a sophisticated male audience; later, it began producing videos and selling merchandise under its own brand.

In 1971, Playboy went public, and in 1999, it reached a peak market capitalization of $671 million. Then things took a turn for the worse: the company lost advertising revenue, and the magazine began operating at a loss. In 2011, Hefner and his partners bought back the company, and in 2020—three years after the founder’s death—his family exited the business.

In 2021, Playboy returned to the stock market through a deal with a SPAC. But the business once again struggled: revenue began to decline, and by the end of 2024, it was lower than the company’s debt. In October 2024, Cooper Hefner, the son of Playboy’s founder, wanted to buy out the company and split it into two parts, but the board of directors rejected the proposal, deeming it unprofitable.

Since the beginning of the year, Playboy's stock price has fallen by nearly 28%.

That said, two Wall Street analysts recommend buying these stocks, while another suggests holding them. There are no recommendations to sell. The average price target is $2.83, which implies the potential for a twofold increase from the stock’s closing price on August 11.