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Jakks (JAKK) Down 13.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Jakks Pacific (JAKK - Free Report) . Shares have lost about 13.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jakks due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
JAKKS Pacific reported fourth-quarter 2020 results, wherein the top and the bottom line beat the Zacks Consensus Estimate. The company’s net sales topped the Zacks Consensus Estimate for the third straight quarter while earnings topped estimates for the second consecutive quarter.
Nonetheless, the company stated that it is making significant progress in terms of operating performance on the back of cost-saving initiatives and improved inventory management. Also, the company stated that it expects toy sales to get a boost from a robust slate of entertainment content from its licensing partners, especially Disney. Notably, the company anticipates more people to return to the normal pattern of shopping, gift-giving and celebrating Halloween.
Q4 Earnings and Revenues
The company reported adjusted loss of 80 cents per share, narrower than the Zacks Consensus Estimate of a loss of $1.94. However, the metric improved 69.2% from the prior-year loss of $2.60 per share.
Revenues of $128.3 million beat the consensus mark of $115.7 million. However, the top line declined 16.3% year over year due to reduction in sales of products related to Disney’s Frozen and Frozen 2.
Net sales at the company’s Toys/Consumer Products segment decreased 19% globally, on a year-over-year basis. The decline was primarily due to lower sales of products related to Disney’s Frozen 2.
Net sales at the company’s Disguise (Halloween) segment increased 91% year over year.
Operating Highlights
In the reported quarter, gross margin was 32.8%, up 240 basis points (bps) from the prior-year level. Margins benefited from effective cost control, lower royalty and improved inventory management. Adjusted EBITDA came in at $3.8 million compared with $3.3 million reported in the prior-year quarter.
Balance Sheet
As of Dec 31, 2020, cash and cash equivalents (including restricted cash) were $92.7 million compared with $66.3 million as of Dec 31, 2019. Debt, non-current portion, net as of Dec 31 totaled $150.4 million compared with $175 million at the end of 2019.
2020 Highlights
For the year, net sales amounted to $515.9 million, down 13.8% from 2019. Loss per share came in at $1.7, improving from a loss of $7.3 per share in the previous year.
Adjusted EBITDA for the whole year summed up to $28.1 million, 49% up from $18.9 million in 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 5.17% due to these changes.
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. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% 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
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Jakks has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Jakks (JAKK) Down 13.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Jakks Pacific (JAKK - Free Report) . Shares have lost about 13.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Jakks due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
JAKKS Pacific Beats Q4 Earnings & Revenue Estimates
JAKKS Pacific reported fourth-quarter 2020 results, wherein the top and the bottom line beat the Zacks Consensus Estimate. The company’s net sales topped the Zacks Consensus Estimate for the third straight quarter while earnings topped estimates for the second consecutive quarter.
Nonetheless, the company stated that it is making significant progress in terms of operating performance on the back of cost-saving initiatives and improved inventory management. Also, the company stated that it expects toy sales to get a boost from a robust slate of entertainment content from its licensing partners, especially Disney. Notably, the company anticipates more people to return to the normal pattern of shopping, gift-giving and celebrating Halloween.
Q4 Earnings and Revenues
The company reported adjusted loss of 80 cents per share, narrower than the Zacks Consensus Estimate of a loss of $1.94. However, the metric improved 69.2% from the prior-year loss of $2.60 per share.
Revenues of $128.3 million beat the consensus mark of $115.7 million. However, the top line declined 16.3% year over year due to reduction in sales of products related to Disney’s Frozen and Frozen 2.
Net sales at the company’s Toys/Consumer Products segment decreased 19% globally, on a year-over-year basis. The decline was primarily due to lower sales of products related to Disney’s Frozen 2.
Net sales at the company’s Disguise (Halloween) segment increased 91% year over year.
Operating Highlights
In the reported quarter, gross margin was 32.8%, up 240 basis points (bps) from the prior-year level. Margins benefited from effective cost control, lower royalty and improved inventory management. Adjusted EBITDA came in at $3.8 million compared with $3.3 million reported in the prior-year quarter.
Balance Sheet
As of Dec 31, 2020, cash and cash equivalents (including restricted cash) were $92.7 million compared with $66.3 million as of Dec 31, 2019. Debt, non-current portion, net as of Dec 31 totaled $150.4 million compared with $175 million at the end of 2019.
2020 Highlights
For the year, net sales amounted to $515.9 million, down 13.8% from 2019. Loss per share came in at $1.7, improving from a loss of $7.3 per share in the previous year.
Adjusted EBITDA for the whole year summed up to $28.1 million, 49% up from $18.9 million in 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 5.17% due to these changes.
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. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% 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
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Jakks has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.