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Is JAKKS Pacific Inc (NASDAQ:JAKK) Undervalued?

Becky Mayes

JAKKS Pacific Inc (NASDAQ:JAKK), a leisure company based in United States, saw a decent share price growth in the teens level on the NasdaqGS over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on JAKKS Pacific’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for JAKKS Pacific

What is JAKKS Pacific worth?

Great news for investors – JAKKS Pacific is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $3.22, but it is currently trading at US$2.55 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because JAKKS Pacific’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from JAKKS Pacific?

NasdaqGS:JAKK Future Profit September 7th 18

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. JAKKS Pacific’s earnings over the next few years are expected to increase by 96.1%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since JAKK is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on JAKK for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy JAKK. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on JAKKS Pacific. You can find everything you need to know about JAKKS Pacific in the latest infographic research report. If you are no longer interested in JAKKS Pacific, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.