It has been about a month since the last earnings report for JAKKS Pacific, Inc. (JAKK - Free Report) . Shares have added about 1.4% in the past month.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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 Q2 Loss Wider than Expected
JAKKS Pacific posted wider-than-expected loss and lower-than-expected sales in the second quarter of 2017.
This California-based company’s loss of $0.66 per share was much wider compared with the prior-year quarter loss of $0.27 and the Zacks Consensus Estimate of a loss of $0.24.
JAKKS Pacific’s revenues declined 15.2% year over year to $119.6 million, owing to the company’s suspension of sales to one of its retail customers and decrease in several of its film-related licensed properties. Revenues also lagged the Zacks Consensus Estimate of $131.8 million by over 9%.
Behind the Headline Numbers
Gross margin in the second quarter was 28.2%, down 360 basis points (bps) year over year, given deleveraging of fixed costs, product mix shifts and closeout sales in some categories.
Adjusted EBITDA (earnings before interest, taxes and amortization) was a negative $5.4 million compared with the year-ago quarter’s $4.0 million.
For 2017, JAKKS Pacific continues to expect higher net income, earnings per share and adjusted EBITDA on lower net sales compared to 2016. Moreover, the company anticipates enhanced profitability in the second half of 2017 due to its efficient marketing undertakings and cost-cutting policies. The company’s continued focus on building its base of evergreen brands and categories as well as entering new categories, creating a strong portfolio of new and existing licenses, and developing owned IP and content are also expected to drive profits.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, JAKKS' stock has a nice Growth Score of B, though it is lagging a lot on the momentum front with a F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.