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Here's Why JAKKS Pacific (JAKK) Deserves a Place in Your Portfolio
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Despite the coronavirus-induced woes, shares of JAKKS Pacific, Inc. (JAKK - Free Report) have done exceptionally well. In the past six months, shares of the company have soared 117%, compared with the industry’s growth of 7.5%. The company has been benefiting from strategic acquisitions, solid international footprint, focus on innovation, and collaborations with popular brands and movie franchisees.
Moreover, the consensus mark for 2021 earnings has witnessed upward estimate revisions, which reflects analysts’ optimism regarding the company’s growth potential. Over the past 30 days, the Zacks Consensus Estimate for its 2021 loss has narrowed to 80 cents from a loss of $2.9.
Factors to Note
The company is benefiting from solid demand for toys based on video game properties such as Nintendo, Sonic the Hedgehog and Apex Legends. Moreover, the company witnessed solid growth at its outdoor seasonal division of ball pits, play structures, activity tables, foot-to-floor ride-ons, skateboards and other spring-summer inspired toys. Notably, sales for this division amounted to 18.3 million, up 43% from $12.8 million reported in first-quarter 2020.
Going forward, the company plans to launch the Encanto product line in the girls division, which comprises fashion dolls, large dolls, playsets, dress-up and role play. The pipeline also includes extension of its Perfectly Cute doll and accessory line at Target, new launch of toys and collectibles based on Haribo (a global gummy candy brand). In the boys division, the company intends to work on the Black and Decker product line along with the re-release of Creepy Crawlers. The company believes that core, basic products, popular entertainment licenses with proven play patterns will drive growth in 2021. Moreover, it anticipates robust sales of Black & Decker play tools in 2021. Notably, classic toys based on popular television shows and movies, large-scale figures based on the boy’s action entertainment brands and Pre-School toys are favored by kids. Thus, these are expected to act as major catalysts.
Image Source: Zacks Investment Research
JAKKS Pacific is committed toward diversifying its footprint outside the United States. Consistent with its endeavors, the company has opened sales offices and expanded distribution agreements for its products. Its partnership with Meisheng is expected to result in robust growth in Asia. Meanwhile, after launching Tsum Tsum in the key international markets like Latin America and Asia, the company plans to expand its distribution in new territories in the days ahead.
Over the past few quarters, JAKKS Pacific has been 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. During the first quarter of 2020, the company implemented a multi-tier development program focusing on design and developing products specific to the retail channels. This includes the likes of Walmart, Target, Amazon, Tesco, Etica and Aldi, TJ Maxx, Ross, Gamestop among others. During first-quarter 2021, online sales of the company climbed more than 20% in 2020, which accounted for 17% of its total POS at these customers.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Image: Bigstock
Here's Why JAKKS Pacific (JAKK) Deserves a Place in Your Portfolio
Despite the coronavirus-induced woes, shares of JAKKS Pacific, Inc. (JAKK - Free Report) have done exceptionally well. In the past six months, shares of the company have soared 117%, compared with the industry’s growth of 7.5%. The company has been benefiting from strategic acquisitions, solid international footprint, focus on innovation, and collaborations with popular brands and movie franchisees.
Moreover, the consensus mark for 2021 earnings has witnessed upward estimate revisions, which reflects analysts’ optimism regarding the company’s growth potential. Over the past 30 days, the Zacks Consensus Estimate for its 2021 loss has narrowed to 80 cents from a loss of $2.9.
Factors to Note
The company is benefiting from solid demand for toys based on video game properties such as Nintendo, Sonic the Hedgehog and Apex Legends. Moreover, the company witnessed solid growth at its outdoor seasonal division of ball pits, play structures, activity tables, foot-to-floor ride-ons, skateboards and other spring-summer inspired toys. Notably, sales for this division amounted to 18.3 million, up 43% from $12.8 million reported in first-quarter 2020.
Going forward, the company plans to launch the Encanto product line in the girls division, which comprises fashion dolls, large dolls, playsets, dress-up and role play. The pipeline also includes extension of its Perfectly Cute doll and accessory line at Target, new launch of toys and collectibles based on Haribo (a global gummy candy brand). In the boys division, the company intends to work on the Black and Decker product line along with the re-release of Creepy Crawlers. The company believes that core, basic products, popular entertainment licenses with proven play patterns will drive growth in 2021. Moreover, it anticipates robust sales of Black & Decker play tools in 2021. Notably, classic toys based on popular television shows and movies, large-scale figures based on the boy’s action entertainment brands and Pre-School toys are favored by kids. Thus, these are expected to act as major catalysts.
JAKKS Pacific is committed toward diversifying its footprint outside the United States. Consistent with its endeavors, the company has opened sales offices and expanded distribution agreements for its products. Its partnership with Meisheng is expected to result in robust growth in Asia. Meanwhile, after launching Tsum Tsum in the key international markets like Latin America and Asia, the company plans to expand its distribution in new territories in the days ahead.
Over the past few quarters, JAKKS Pacific has been 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. During the first quarter of 2020, the company implemented a multi-tier development program focusing on design and developing products specific to the retail channels. This includes the likes of Walmart, Target, Amazon, Tesco, Etica and Aldi, TJ Maxx, Ross, Gamestop among others. During first-quarter 2021, online sales of the company climbed more than 20% in 2020, which accounted for 17% of its total POS at these customers.
JAKKS Pacific, which shares space with Mattel, Inc. (MAT - Free Report) , Hasbro Inc. (HAS - Free Report) and Activision Blizzard, Inc. , carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>