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JAKKS Pacific (JAKK) Outruns Peers, Surges 98% in 6 Months

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Zacks Equity Research
·3 min read
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JAKKS Pacific, Inc. JAKK is gaining from new launches, solid international footprint, focus on innovation and collaborations with popular brands and movie franchisees. In the past six months, shares of the company have surged 98.3%, compared with the industry’s rally of 14.7%.

Moreover, the consensus mark for 2021 earnings has witnessed upward estimate revisions, which reflects analysts’ optimism regarding the company’s growth potential. Over the past 30 days, the Zacks Consensus Estimate for its 2021 loss has narrowed to $2.90 from a loss of $3.87.

Growth Drivers

The company is benefiting from new launches. Meanwhile, the company’s ReDo line of skateboards continues to exhibit robust performance. The U.S. sales for its ReDo Skateboard soared more than 300% in fourth-quarter 2020 and over 600% in 2020. Moreover, in fourth-quarter 2020, Disney Princess dolls, accessories and play sets sales increased nearly 33% year over year. Moreover, the company’s Nintendo's Super Mario Brothers, Sonic the Hedgehog and Apex Legends performed excellently in fourth-quarter 2020. The company believes that core, basic products, popular entertainment licenses with proven play patterns will drive growth in 2021. Moreover, the company anticipates robust sales of Black & Decker play tools in 2021.

JAKKS Pacific is committed toward diversifying presence outside the United States. Consistent with its endeavors, the company has opened sales offices and expanded distribution agreements for its products. During third-quarter 2020, the company made significant progress with respect to direct distribution in Italy, Spain, and Mexico. Moreover, the company stated that the benefits of the same are likely to show in 2021.

The company has regularly innovated its products in an effort to cater to the changing play pattern of children and boost demand. Recently, the demand for physical toys has been declining due to younger children’s preference for digital games and other electronic learning tools. In sync with this trend, the company has introduced a number of mobile gaming apps and digital games, along with the physical toys, which would help it to capitalize on the demand for smartphone gaming.

It realizes the importance of online retailing and shifted focus to boosting online sales. Over the past few quarters, JAKKS Pacific has been committed to creating digital experiences for online shoppers such as videos, 360-degree product images and enhanced web pages.

Zacks Rank & Other Key Picks

JAKKS Pacific, which shares space with Hasbro, Inc. HAS, carries a Zacks Rank #2 (Buy). Some other top-ranked stocks, which warrant a look in the same space include Mattel, Inc. MAT and Take-Two Interactive Software, Inc. TTWO. Both the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Mattel have soared 78.7% in the past six months.

Take-Two Interactive Software has an impressive long-term earnings growth rate of 12.4%.

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Mattel, Inc. (MAT) : Free Stock Analysis Report

TakeTwo Interactive Software, Inc. (TTWO) : Free Stock Analysis Report

Hasbro, Inc. (HAS) : Free Stock Analysis Report

JAKKS Pacific, Inc. (JAKK) : Free Stock Analysis Report

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