JAKKS Pacific: Upcoming Strong Performance Makes It A Buy

Andriy Blokhin
494 Followers
(22min)

Summary

  • JAKK represents an attractive buy opportunity due to the upcoming strong 2025 performance that the market undervalues.
  • The company's shift towards evergreen IP and international expansion, including partnerships with Authentic Brands Group, should smooth out earnings variability and drive growth outside of Q3-Q4.
  • Despite risks that US tariffs on China may hold JAKK back, there are mitigating factors that will outweigh this negative.
  • JAKK's valuation multiples are at least 50% lower compared to its peers despite strong growth prospects, making it a potential acquisition target and an undervalued stock.
  • With a debt-free balance sheet, I speculate that JAKK may soon announce share buybacks or dividends, which may work as a catalyst for stock repricing.

The Simpsons Movie - UK film premiere - Red Carpet

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JAKKS Pacific, Inc. (NASDAQ:JAKK), a toy designer and distributor, that trades at least 50% below its peers. Multiple hot movie releases in 2025-2027 plus films released in the last couple of months should expand JAKK's earnings and

This article was written by

494 Followers
I am an individual investor analyzing equities based on their cash flow potential, relative value and economic moat. I bring years of public accounting experience, economics and quantitative background to my research. In my idea generation process, story-telling must be backed up by quantitative analysis to pin down the upside/downside potential. Focus is on both the long/short side, although I enjoy short stories more.I am proficient in Python and use algorithms to comb through distant corners of the stock market to uncover companies that the market either overhypes or ignores. While the focus is on fundamental analysis, I am also incorporating technical analysis to maximize the success rate of my ideas. I also write educational articles on different financial and accounting issues that affect companies' valuations and help investors make better and informed decisions. I am a former certified public accountant (CPA) with years of public accounting experience at a Big Four company in the US. My educational background is in accounting and economics with master's degrees in both fields from the University of Notre Dame and University of Virginia. I also pursued a PhD in economics program researching aspects of sovereign debt defaults in monetary unions. After obtaining an all but dissertation status, I left the program to pursue other professional interests. My current focus is on writing on Seeking Alpha, investing and my YouTube channel (Andriy Blokhin) where I create educational videos on investing and economic topics

Analyst’s Disclosure:I/we have a beneficial long position in the shares of JAKK either through stock ownership, options, or other derivatives. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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