Jakks (JAKK) Up 28% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Jakks Pacific (JAKK). Shares have added about 28% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jakks due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
JAKKS Pacific Q3 Earnings & Revenues Beat Estimates
JAKKS reported third-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. While revenues outpaced the consensus estimate for the eighth straight quarter, earnings beat the same for the third consecutive quarter.
The company’s product margins have seen a notable boost this year, thanks to a more stable supply chain and reduced promotional activities compared with the previous year.
Q3 Earnings and Revenues
During the quarter, the company reported adjusted earnings per share (EPS) of $4.75, beating the Zacks Consensus Estimate of $3.46. In the prior-year quarter, JAKK reported adjusted EPS of $3.80.
Quarterly revenues of $309.7 million surpassed the consensus mark of $284 million. However, the top line declined 4% on a year-over-year basis. During the quarter, it reported solid contributions from Costumes. Yet, dismal Toys/Consumer Products sales hurt its top line.
Net sales in the Toys/Consumer Products segment decreased 9% year over year to $246 million.
Costume net sales rose 19% year over year to $63.7 million.
Operating Highlights
In the reported quarter, the gross margin reached 34.5%, up 600 basis points from the prior-year levels. We predicted the metric to be 26.9%.
Adjusted EBITDA amounted to $67.1 million compared with $59.4 million a year ago.
Balance Sheet
As of Sep 30, the company’s cash and cash equivalents (including restricted cash) were $96.4 million compared with $76.6 million as of Sep 30, 2022.
As of Sep 30, 2023, total debt was zero, in contrast to $67.7 million as of Sep 30, 2022, and $67.2 million as of Dec 31, 2022.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
Currently, Jakks has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Jakks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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JAKKS Pacific, Inc. (JAKK) : Free Stock Analysis Report
