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JAKKS Pacific (JAKK) Outshines Peers, Surges 28% in 3 Months

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JAKKS Pacific, Inc. (JAKK - Free Report) is poised to benefit from digitalization, strategic acquisitions, solid international footprint, innovation, and collaborations with popular brands and movie franchisees.

Notably, shares of JAKKS Pacific have outperformed the industry in the past three months. The stock has gained 27.6% against the Zacks Toys - Games – Hobbies industry’s fall of 4.4%.

Growth Catalysts

JAKKS Pacific realizes the importance of online retailing and shifted considerable focus to aggressively boosting online sales. Over the past few quarters, JAKKS Pacific has focused on creating digital experiences for online shoppers such as videos, 360-degree product images and enhanced web pages. It continues to modify its sales and logistics capabilities in order to capitalize on this continued shift to online. This modification in sales and logistics is likely to benefit the company in the upcoming periods.

Meanwhile, the company has introduced a number of mobile gaming apps and digital games along with physical toys, which would help the company cash in on demand for smartphone gaming. It is also connecting with customers through digital videos, display banners and social ads, which would improve customer experience. Such investments in digital innovation will help in brand building and capitalizing on the lucrative technology-based gaming market.

JAKKS Pacific has emerged as a diversified consumer products company buoyed by a string of acquisitions over the past several years. Notably, its collaborations with Disney, Skechers, Nickelodeon, Cabbage Patch Kids and Chico to manufacture toys and merchandises are commendable. During the third quarter of 2020, the company launched APEX Legends (based on the Battle Royale video game from Electronic Arts). With the broad rights acquired, the company expects the APEX Legends toys to perform well going forward.

It will also be launching a talking Mario toy - It's-A Me, Mario and oversize feature action figure with integrated voice and sounds in the upcoming periods. Moreover, products related to the upcoming release of Raya and Last Dragon are in the pipeline. Meanwhile, the company expects its ReDo line of skateboards to perform well in the holiday season as new distribution channels have been added related to the same.

Meanwhile, JAKKS Pacific continues to diversify its footprint outside the United States. Consistent with its endeavors, the company has opened sales offices and expanded distribution agreements for its products. During the third quarter, the company made significant progress with respect to direct distribution in Italy, Spain and Mexico. The company stated that the benefits of the same are likely to get reflected in 2021.

Zacks Rank & Other Key Picks

JAKKS Pacific has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other top-ranked stocks in the same space include Activision Blizzard, Inc. (ATVI - Free Report) , Mattel, Inc. (MAT - Free Report) and Glu Mobile Inc. (GLUU - Free Report) , each carrying a Zacks Rank #2.

Activision Blizzard has a three-five-year earnings per share growth rate of 16%.

Mattel and Glu Mobile’s earnings for 2021 are expected to surge 33.7% and 33.6%, respectively.

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