It has been about a month since the last earnings report for Jakks Pacific (JAKK - Free Report) . Shares have added about 3.8% 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 Reports Wider-Than-Expected Q2 Loss
JAKKS Pacific incurred adjusted loss of 83 cents per share in second-quarter 2019, wider than the Zacks Consensus Estimate of loss of 44 cents. The company incurred loss of 72 cents per share in the prior-year quarter.
Its net sales totaled $95.2 million, which surpassed the Zacks Consensus Estimate by 4.5%. However, the top line fell 10% on a year-over-year basis. The company expects sales to grow nearly 5% in 2019.
Its profit margins have been low, given the declining sales trend and higher loss from operations. However, management stated that the company is trying to improve adjusted EBITDA in 2019.
Operating Highlights
In the reported quarter, gross margin was 18.6%, down 780 basis points (bps) from the prior-year quarter. Adjusted EBITDA was a negative $11.5 million compared with a negative $8.5 million in the prior-year quarter.
Balance Sheet
As of Jun 30, 2019, cash and cash equivalents amounted to $37 million compared with $53.3 million as of Dec 31, 2018. Inventory declined to $53.5 million from $53.9 million at the end of Dec 31, 2018. Long-term debt, as of Jun 30, 2019, totaled $160.7 million, up from $139.8 million at the end of 2018.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -46.15% due to these changes.
VGM Scores
Currently, Jakks has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
It has been about a month since the last earnings report for Jakks Pacific (JAKK - Free Report) . Shares have added about 3.8% 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 Reports Wider-Than-Expected Q2 Loss
JAKKS Pacific incurred adjusted loss of 83 cents per share in second-quarter 2019, wider than the Zacks Consensus Estimate of loss of 44 cents. The company incurred loss of 72 cents per share in the prior-year quarter.
Its net sales totaled $95.2 million, which surpassed the Zacks Consensus Estimate by 4.5%. However, the top line fell 10% on a year-over-year basis. The company expects sales to grow nearly 5% in 2019.
Its profit margins have been low, given the declining sales trend and higher loss from operations. However, management stated that the company is trying to improve adjusted EBITDA in 2019.
Operating Highlights
In the reported quarter, gross margin was 18.6%, down 780 basis points (bps) from the prior-year quarter. Adjusted EBITDA was a negative $11.5 million compared with a negative $8.5 million in the prior-year quarter.
Balance Sheet
As of Jun 30, 2019, cash and cash equivalents amounted to $37 million compared with $53.3 million as of Dec 31, 2018. Inventory declined to $53.5 million from $53.9 million at the end of Dec 31, 2018. Long-term debt, as of Jun 30, 2019, totaled $160.7 million, up from $139.8 million at the end of 2018.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -46.15% due to these changes.
VGM Scores
Currently, Jakks has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on JAKK - FREE