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JAKKS Pacific: Considerable Upside If The Turnaround Is Successful

Aug. 03, 2021 2:22 AM ETJAKKS Pacific, Inc. (JAKK)6 Comments
Value of Stocks profile picture
Value of Stocks


  • JAKKS has been struggling with declining revenues and losses for a few years.
  • Q1 results show promising signs of a turnaround, with increased revenues and expanded margins.
  • Q3 and Q4 are the most important quarters for JAKKS, and revenues as well as margins tend to increase.
  • If the performance in Q1 continues into the end of the year, JAKKS has considerable upside from these levels.

Huge pile of toys
dorian2013/iStock via Getty Images

JAKKS Pacific, Inc. (NASDAQ:JAKK) is a manufacturer of toys and costumes. JAKKS has some very interesting licensing deals with major brands that allows them to sell toys and costumes with those trademarks. The company has been

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Value of Stocks profile picture
Value of Stocks is an independent provider of stock analysis, focused on deep value stocks, net-nets and special situations. Understanding the business well enough to value it, will allow you to buy stocks under their true value. We look for stocks globally that we can thoroughly analyze and value.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in JAKK over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (6)

Analyze This profile picture
Very poor report clearly written on the fly. I knew it was going to be a shallow report once I noticed the author refereeing to EV/sales as a proxy for valuation. I noticed not one mention of the key value metric: EBITDA. I also noticed that the author failed to mention the refinancing of the debt and that 90% of the convertible bonds were already converted into common stock. I couldn't stop laughing when the author referenced lagging sales because sales increased 26% vs 27% for the market. Pretty bad in my opinion.
Acemaker12 profile picture
So what’s the potential upside?
Agree with mswbcm. You need to adjust all your numbers for Q2!
Also, how can you talk about debt instead of net debt, which is considerably lower (thanks to their sizable cash position)? Please update with q2 results or this is a totally irrelevant article
@mswbcm There was a reference to net debt in the article:

"Net debt as of Q1 was ~$78M, compared with ~127M in 4Q20, which shows a great deal of progress and commitment to clean up the balance sheet. At the end of the quarter it had ~$80.4M in cash and cash equivalents."
Q2 results are out... so the article is extremely outdated!
Convertibles have been pretty much converted in full.
Q2 results were outstanding.
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