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Mattel (MAT) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Mattel (MAT) closed at $11.96, marking a +1.44% move from the previous day. The stock lagged the S&P 500's daily gain of 3.25%. Meanwhile, the Dow gained 3.84%, and the Nasdaq, a tech-heavy index, added 3.06%.

Heading into today, shares of the toy maker had lost 19.25% over the past month, lagging the Consumer Discretionary sector's loss of 10.49% and the S&P 500's loss of 9.87% in that time.

Investors will be hoping for strength from MAT as it approaches its next earnings release. The company is expected to report EPS of -$0.43, up 2.27% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $660.12 million, down 4.22% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.06 per share and revenue of $4.57 billion. These totals would mark changes of +120% and +1.46%, respectively, from last year.

Any recent changes to analyst estimates for MAT should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 188.24% higher within the past month. MAT is holding a Zacks Rank of #1 (Strong Buy) right now.

Digging into valuation, MAT currently has a Forward P/E ratio of 196.5. This represents a premium compared to its industry's average Forward P/E of 22.8.

Investors should also note that MAT has a PEG ratio of 19.65 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. MAT's industry had an average PEG ratio of 1.88 as of yesterday's close.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 192, which puts it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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