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Why Is Jakks (JAKK) Down 60.8% Since Last Earnings Report?

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It has been about a month since the last earnings report for Jakks Pacific (JAKK - Free Report) . Shares have lost about 60.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Jakks due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

JAKKS Pacific Q4 Earnings Miss Estimates, Revenues Top

JAKKS Pacific reported fourth-quarter 2019 financial numbers wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.

The company reported adjusted loss of 26 cents per share, wider than the Zacks Consensus Estimate of a loss of 17 cents by 52.9%. However, the figure narrowed from the year-ago loss of 37 cents by 29.7%.

Revenues of $152.5 million beat the consensus mark of $149.9 million by 1.7%. Moreover, the top line increased 15.3% year over year. This uptick can be attributed to strong sales of Disney Frozen 2 and Disguise products.

Operating Highlights

In the reported quarter, gross margin was 30.4%, down 20 basis points (bps) from the prior-year level. Adjusted EBITDA came in at $3.3 million against a negative of $1.6 million reported in the prior-year quarter.

Balance Sheet

As of Dec 31, 2019, cash and cash equivalents amounted to $61.6 million compared with $53.3 million as of Dec 31, 2018. Inventory increased to $54.3 million from $53.9 million at 2018 end. Long-term debt as of Dec 31 totaled $175 million, up from $139.8 million at the end of 2018.

2019 Highlights

Net sales amounted to $598.6 million, up 5% year over year.

Adjusted loss per share for the year ended Dec 31, 2019 was reported at 73 cents compared with a loss of $1.25 in 2018.

Adjusted EBITDA for the full year was $18.9 million compared with $2.3 million in 2018.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -76.32% due to these changes.

VGM Scores

At this time, Jakks has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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.


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