JAKKS Pacific, Inc. (JAKK ) has been positioning itself for further growth as it expands its licensing agreements. The company is a value stock with a price-to-sales ratio of just 0.5, well under the industry average of 1.1.JAKKS Pacific manufactures toys and consumer products under its own proprietary brands and through a variety of toy licenses. Its product lines include Action Figures, Electronics, Dolls, Dress-Up, Role Play, Art Activity Kits, Construction Toys and Pet Toys.
It licenses toys for many well-known brands including Disney, Warner Bros., Ultimate Fighting Championship, Hello Kitty, Graco and Cabbage Patch Kids.
JAKKS Beat By 17.4% in the First Quarter
On Apr 22, JAKKS Pacific reported first quarter results and surprised on the Zacks Consensus by 4 cents. Earnings per share were a loss of 19 cents which was better than the loss of 23 cents that analysts had expected and much better than the loss of 40 cents in the year ago period.
Sales slipped to $77.3 million from $108.7 million in the first quarter of 2009.
Production has begun on the 2010 fall portfolio and the company will begin shipping new items for the second half of the year in the second quarter.
Outlook for 2010
The first quarter was slightly better than the company's expectations so it believes it can still maintain its prior earnings guidance of $1.10 to $1.20 for 2010. Net sales are expected to be in the range of $660 million to $670 million.
Zacks Consensus Estimates Climb
After the April first quarter report, analysts raised second quarter and full year estimates to be in line with the company's guidance.
The second quarter Zacks Consensus Estimate is now expected to be 5 cents compared to a loss of 4 cents just 60 days ago.
The full year consensus jumped to the high end of the company's guidance range of $1.19 per share from $1.12 2 months before.
This is earnings growth of 15.6% in 2010.
JAKKS Pacific is schedule to report second quarter results on Jul 27.
Value Fundamentals
JAKKS Pacific has an attractive valuation. It is trading at 12x forward earnings which is well under the industry average of 15.6 and within the value parameters.
The company also has a price-to-book ratio of 1.1, which is also under the industry average of 1.9. Additionally, it has a solid 5-year average return on equity (ROE) of 11.7%.
http://www.google.com/finance?q=NASDAQ:JAKK
http://www.reuters.com/finance/stocks/overview?symbol=JAKK.O
http://www.reuters.com/finance/stocks/analyst?symbol=JAKK.O
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