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3 Toys & Games Stocks to Keep an Eye on Amid Rising US Sales
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The Zacks Toys - Games – Hobbies industry benefits from the robust demand for smart toys, STEM (science, technology, engineering and math) toys, sports toys, and fashion dolls and accessories. Industry participants have been undertaking efforts on the digital front and focusing on better execution of marketing and promotional initiatives to drive growth. Stocks like Hasbro, Inc. (HAS - Free Report) , Mattel, Inc. (MAT - Free Report) and JAKKS Pacific, Inc. (JAKK - Free Report) are likely to gain from these trends.
Industry Description
The Zacks Toys - Games – Hobbies industry comprises companies that design, manufacture and sell various games and toys. While traditional toymakers primarily focus on marketing and selling action figures, accessories, dolls, youth electronics, and arts and crafts, other industry players develop and market content and services on video game consoles, personal computers and mobile. Some industry participants offer video game platforms, playing cards, Karuta and other products, as well as handheld and home console hardware systems and related software. Some companies develop and operate retail and online military simulation games, and offer multi- and single-player games.
4 Trends Shaping the Future of Zacks Toys - Games - Hobbies Industry
STEM Toys Gaining Popularity: The increasing demand for educational experiences outside traditional classrooms is a significant factor driving market growth. Parents are increasingly looking for toys that promote problem-solving, creativity and critical thinking in their children. STEM toys, in particular, are gaining popularity due to their ability to spark curiosity and develop practical skills, making them a top choice for many families. Factors such as heightened interest in coding and robotics toys have significantly shaped the market landscape. Industry players are capitalizing on new distribution methods, developing digital-play components, exploring ventures with other industries and focusing on international expansion to drive growth. The industry has enormous growth potential in China and Brazil.
Focus on Emerging Markets: Industry participants are focusing on expanding their presence in emerging markets in Eastern Europe, Asia, and Latin and South America. Emerging markets offer greater opportunities for revenue growth than developed markets.
U.S. Toy Sales Increase: U.S. toy industry sales saw 6% growth and a 3% increase in units sold through April 2025, according to Circana reports. The rise was fueled by robust adult demand, particularly for trading cards like Pokémon and One Piece, as well as building sets. Adult buyers spent $1.8 billion in first-quarter 2025 alone, with many collecting rather than playing with the cards. Meanwhile, pricing trends show consumers either trading up or down, with strong sales in both premium and value-priced toys, as tariff concerns shape purchasing behavior.
High Costs Remain Concerning: Cost inflation hurt the industry due to rising raw material prices. Higher employee-related expenses are also hurting the industry. The firms have been resorting to product launches and shifting toward more technology-driven toys to boost sales, which may drive profits in the long haul. However, costs related to the initiatives may prove detrimental.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Toys – Games – Hobbies industry is grouped within the broader Zacks Consumer Discretionary Sector.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects.
The Zacks Toys – Games – Hobbies industry currently carries a Zacks Industry Rank #6, which places it in the top 14% of 244 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that investors can take a look at, let us analyze the industry’s recent stock-market performance and valuation picture.
Industry Outperforms the S&P 500
The Zacks Toys – Games – Hobbies industry has outperformed the S&P 500 Index. The industry has rallied 13.4% over this period, outpacing the S&P 500’s rise of 11.9%. In the same time frame, the sector has grown 18.7%.
One-Year Price Performance
Industry's Current Valuation
Comparing the industry with the S&P 500 Index on the basis of forward 12-month price-to-earnings, which is a commonly used multiple for valuing the industry, we see that the industry is trading at 13.05X, lower than the S&P 500’s 21.94X and the sector’s 19.89X.
Over the last five years, the industry traded as high as 29.10X and as low as 11.17X, with the median being 14.34X, as the chart shows.
P/E(F12M)
Three Zacks Toy Stocks to Keep an Eye On
JAKKS Pacific: The company is benefiting from the Freight on Board business model, licensing initiatives and retail expansion efforts. Also, the emphasis on collaborations with popular brands and movie franchises bodes well.
Shares of this Zacks Rank #1 (Strong Buy) company have gained 18.9% in the past year. The company’s 2025 earnings are likely to witness a year-over-year increase of 9.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price & Consensus: JAKK
Mattel: The strong rally from Disney Princess and Wicked, along with strength in Hot Wheels, Barbie and UNO brands, bode well for the company. The recent entertainment releases, theatrical and on the Netflix platform, along with the renewed and existing licensing partnership, bode well for Mattel’s prospects.
Shares of this Zacks Rank #3 (Hold) company have gained 8% in the past year. The company’s 2025 earnings are pegged at $1.62, suggesting no year-over-year change.
Price & Consensus: MAT
Hasbro: The company is benefiting from strong performance across the MAGIC ecosystem. Growth in licensing operations added to the positives. Going forward, Hasbro will emphasize diversifying its sourcing footprint, refining SKU assortments, enhancing promotional efforts and executing targeted pricing actions to drive growth. Also, the focus on the entertainment pipeline, partnerships and product innovations bodes well.
Shares of this Zacks Rank #3 company have gained 13.4% in the past year. The company’s 2025 earnings are likely to witness a year-over-year increase of 5.2%.
Price & Consensus: HAS
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3 Toys & Games Stocks to Keep an Eye on Amid Rising US Sales
The Zacks Toys - Games – Hobbies industry benefits from the robust demand for smart toys, STEM (science, technology, engineering and math) toys, sports toys, and fashion dolls and accessories. Industry participants have been undertaking efforts on the digital front and focusing on better execution of marketing and promotional initiatives to drive growth. Stocks like Hasbro, Inc. (HAS - Free Report) , Mattel, Inc. (MAT - Free Report) and JAKKS Pacific, Inc. (JAKK - Free Report) are likely to gain from these trends.
Industry Description
The Zacks Toys - Games – Hobbies industry comprises companies that design, manufacture and sell various games and toys. While traditional toymakers primarily focus on marketing and selling action figures, accessories, dolls, youth electronics, and arts and crafts, other industry players develop and market content and services on video game consoles, personal computers and mobile. Some industry participants offer video game platforms, playing cards, Karuta and other products, as well as handheld and home console hardware systems and related software. Some companies develop and operate retail and online military simulation games, and offer multi- and single-player games.
4 Trends Shaping the Future of Zacks Toys - Games - Hobbies Industry
STEM Toys Gaining Popularity: The increasing demand for educational experiences outside traditional classrooms is a significant factor driving market growth. Parents are increasingly looking for toys that promote problem-solving, creativity and critical thinking in their children. STEM toys, in particular, are gaining popularity due to their ability to spark curiosity and develop practical skills, making them a top choice for many families. Factors such as heightened interest in coding and robotics toys have significantly shaped the market landscape. Industry players are capitalizing on new distribution methods, developing digital-play components, exploring ventures with other industries and focusing on international expansion to drive growth. The industry has enormous growth potential in China and Brazil.
Focus on Emerging Markets: Industry participants are focusing on expanding their presence in emerging markets in Eastern Europe, Asia, and Latin and South America. Emerging markets offer greater opportunities for revenue growth than developed markets.
U.S. Toy Sales Increase: U.S. toy industry sales saw 6% growth and a 3% increase in units sold through April 2025, according to Circana reports. The rise was fueled by robust adult demand, particularly for trading cards like Pokémon and One Piece, as well as building sets. Adult buyers spent $1.8 billion in first-quarter 2025 alone, with many collecting rather than playing with the cards. Meanwhile, pricing trends show consumers either trading up or down, with strong sales in both premium and value-priced toys, as tariff concerns shape purchasing behavior.
High Costs Remain Concerning: Cost inflation hurt the industry due to rising raw material prices. Higher employee-related expenses are also hurting the industry. The firms have been resorting to product launches and shifting toward more technology-driven toys to boost sales, which may drive profits in the long haul. However, costs related to the initiatives may prove detrimental.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Toys – Games – Hobbies industry is grouped within the broader Zacks Consumer Discretionary Sector.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects.
The Zacks Toys – Games – Hobbies industry currently carries a Zacks Industry Rank #6, which places it in the top 14% of 244 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that investors can take a look at, let us analyze the industry’s recent stock-market performance and valuation picture.
Industry Outperforms the S&P 500
The Zacks Toys – Games – Hobbies industry has outperformed the S&P 500 Index. The industry has rallied 13.4% over this period, outpacing the S&P 500’s rise of 11.9%. In the same time frame, the sector has grown 18.7%.
One-Year Price Performance
Industry's Current Valuation
Comparing the industry with the S&P 500 Index on the basis of forward 12-month price-to-earnings, which is a commonly used multiple for valuing the industry, we see that the industry is trading at 13.05X, lower than the S&P 500’s 21.94X and the sector’s 19.89X.
Over the last five years, the industry traded as high as 29.10X and as low as 11.17X, with the median being 14.34X, as the chart shows.
P/E(F12M)
Three Zacks Toy Stocks to Keep an Eye On
JAKKS Pacific: The company is benefiting from the Freight on Board business model, licensing initiatives and retail expansion efforts. Also, the emphasis on collaborations with popular brands and movie franchises bodes well.
Shares of this Zacks Rank #1 (Strong Buy) company have gained 18.9% in the past year. The company’s 2025 earnings are likely to witness a year-over-year increase of 9.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price & Consensus: JAKK
Mattel: The strong rally from Disney Princess and Wicked, along with strength in Hot Wheels, Barbie and UNO brands, bode well for the company. The recent entertainment releases, theatrical and on the Netflix platform, along with the renewed and existing licensing partnership, bode well for Mattel’s prospects.
Shares of this Zacks Rank #3 (Hold) company have gained 8% in the past year. The company’s 2025 earnings are pegged at $1.62, suggesting no year-over-year change.
Price & Consensus: MAT
Hasbro: The company is benefiting from strong performance across the MAGIC ecosystem. Growth in licensing operations added to the positives. Going forward, Hasbro will emphasize diversifying its sourcing footprint, refining SKU assortments, enhancing promotional efforts and executing targeted pricing actions to drive growth. Also, the focus on the entertainment pipeline, partnerships and product innovations bodes well.
Shares of this Zacks Rank #3 company have gained 13.4% in the past year. The company’s 2025 earnings are likely to witness a year-over-year increase of 5.2%.
Price & Consensus: HAS
