JAKK  Jakks Pacific Inc.

Exchange

NASDAQ

Sector

Consumer Non-Durables

Industry

Recreational Products/Toys

Market Cap.

91.58M

Vuru Grade

37.48/100

Current Price

$5.70
+0.20 (+3.64%)

Growth Price

$8.98
Undervalued by 57.63%

Stability Price

$8.86
Undervalued by 55.49%

Company Metrics

  • P/E 81.43
  • P/S 0.13
  • P/B 0.66
  • EPS 0.07
  • Cash ROIC -6.34%
  • Cash Ratio 0.74
  • Dividend 0.00 / 0.00 %
  • Avg. Vol. 367,282.00
  • Shares 16.07M
  • Market Cap. 91.58M

Company Description

JAKKS Pacific, Inc. designs, produces, markets, and distributes toys and consumer products worldwide. The company offers traditional toys and electronics, such as action figures and accessories, including licensed characters under Pokemon name; toy vehicles and accessories under Road Champs, Fly Wheels, and MXS names; electronics products under EyeClops Bionic Eye, Laser Challenge, and Plug It In ... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Why Is JAKKS Pacific (JAKK) Down 5.3% Since the Last Earnings Report?
Yahoo Finance - Mar 27, 2017
It has been about a month since the last earnings report for JAKKS Pacific, Inc. JAKK. Shares have lost about 5.3% in that time frame, underperforming the market.
JAKKS Pacific, Inc. (JAKK) Shares Sold by Renaissance Technologies LLC - Chaffey Breeze
Stock Recent Trading Summary: JAKKS Pacific, Inc.'s (JAKK) - Is stories
JAKKS Pacific, Inc. (JAKK) Position Cut by Tudor Investment Corp Et Al
Chaffey Breeze - 5 hours ago
JAKKS Pacific logo Tudor Investment Corp Et Al reduced its position in shares of JAKKS Pacific, Inc. (NASDAQ:JAKK) by 1.7% during the fourth quarter, according to its most recent disclosure with the Securities and Exchange Commission.
Checking the Levels for JAKKS Pacific, Inc. (NASDAQ:JAKK) - Piedmont Register
News Recap: American Capital Agency Corp. (NASDAQ:AGNC) , JAKKS Pacific, Inc ... - NYSE Journal (press release)
Margins improve at JAKKS Pacific despite tough December
Seeking Alpha - Feb 23, 2017
"Several of our key licensed products, including some tied to motion pictures, experienced surprising sales weakness in December, resulting in sales that were only modestly higher than a year ago," notes CEO Stephen Berman.
JAKKS Pacific Inc. (JAKK) Soars 12.87% on February 23 - Equities.com
Hongkong Meisheng Culture Picked Jakks Pacific Inc. (NASDAQ:JAKK) Shares
Small Cap Exclusive (press release) - Mar 17, 2017
In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Jakks Pacific Inc. (NASDAQ:JAKK) reported that Hongkong Meisheng Culture Co Ltd.
JAKKS Pacific (JAKK) Sells $19.3M of Common Stock to JV Partner Meisheng - StreetInsider.com
JAKKS PACIFIC, INC. (NASDAQ:JAKK) Files An 8-K Entry into a Material ... - Market Exclusive
Investing Focus: Indicators in View on Shares of JAKKS Pacific Inc (JAKK)
Rives Journal - 2 hours ago
Technical traders may be looking at recent indicator levels on shares of JAKKS Pacific Inc (JAKK). After a recent check, the 50-day Moving Average is 5.32, the 200-day Moving Average is 7.17, and the 7-day is noted at 5.54.
JAKKS Pacific signs licensing dealwith Warner Bros.
Seeking Alpha - Feb 15, 2017
JAKKS Pacific (NASDAQ:JAKK) announces that it struck a deal with Warner Bros. on a multi-year, global licensing deal to manufacture, market and distribute dolls, everyday dress-up and other items based on the popular DC Super Hero Girls universe.
JAKKS Pacific and Warner Bros. Consumer Products Join Forces on a Global ... - Yahoo Finance
Successful Earnings Option Trading: JAKKS Pacific Inc (NASDAQ:JAKK) - CML News
JAKKS Pacific to Present at the Annual ROTH Conference on March 13th
Yahoo Finance - Mar 7, 2017
JAKKS Pacific, Inc. (JAKK), a leading provider of consumer products for kids, will be presenting at the 29th Annual ROTH Capital Partners Conference.
Toymaker Jakks Pacific Renews Disney Deal - Los Angeles Business Journal
JAKKS Pacific (JAKK) Renews Disney Consumer Products Agreement in China - StreetInsider.com
JAKKS Pacific, Inc. (JAKK) Receives Average Rating of “Hold” from Analysts
Chaffey Breeze - Mar 28, 2017
JAKKS Pacific logo Shares of JAKKS Pacific, Inc. (NASDAQ:JAKK) have received an average rating of “Hold” from the six research firms that are currently covering the firm.
Shares in View: JAKKS Pacific, Inc. (NASDAQ:JAKK) - The Herald
Jakks Pacific Said to Suspend Toy Sales to Kmart
Wall Street Journal - Oct 20, 2016
Toy maker Jakks Pacific Inc. has suspended sales of its products to Sears Holding Corp.'s Kmart chain over worries about its financial health, according to people familiar with the matter.
Has Jakks Pacific Dropped Sears Holdings? Will Other Toy Makers Follow? - TheStreet.com
JAKKS Pacific Launches Cuppatinis™ Toys, Webisodes and App
Business Wire (press release) - Jan 17, 2017
Kids can also watch new Cuppatinis™ webisodes on the JAKKS Pacific YouTube channel as well as engage in four different modes of play with The Cuppatinis™ Tea Party interactive app.
Jakks Pacific debuts new Cuppatinis toy line - Kidscreen
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for JAKK to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate JAKK's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$5.70 Current Price

$8.98 Growth Price (DCF)

Undervalued by 57.63%


Growth Rate Assumed by Market: -500.00%


Future Free Cash Flow Growth Rate: -1.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$8.86 Stability Price (EPV)

Undervalued by 55.49%


Discount Rate: 15.0%

$1.45 NCA Price

Overvalued by 74.49%

$10.54 Book Price

Undervalued by 84.95%


Very Poor Cash Return on Invested Capital over the past 5 years

JAKK has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

JAKK has lost $6.34 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 3.12M -32.62M -89.54M 47.96M 1.66M
divided by
Invested Capital 145.81M 147.96M 298.69M 273.23M 261.43M
Cash ROIC 2.14% -22.05% -29.98% 17.55% 0.63%

Very Poor Return on Equity over the past 5 years

JAKK has shown an inability to deliver results for shareholders. This could be due to poor management, JAKK operating in a highly competitive industry, or having a weak business in general.

JAKK has generated a $11.18 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income -104.80M -53.91M 21.51M 23.17M 1.25M
divided by
Stockholders' Equity 207.22M 148.69M 144.59M 153.00M 134.29M
Return on Equity -50.57% -36.26% 14.88% 15.14% 0.93%

Good Business Performance over the past 10 years

It's likely JAKK has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is JAKK has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

JAKK has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 69.54M 38.52M 82.44M 55.86M 31.80M 3.12M -32.62M -89.54M 47.96M 1.66M

Weak Balance Sheet

JAKK's financial position is not ideal. The key is to check whether JAKK is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 241.47M 169.72M 255.04M 278.55M 257.47M 189.54M 117.29M 71.75M 102.53M 86.06M
Current Assets 526.08M 475.20M 508.17M 512.16M 497.49M 406.06M 320.93M 437.59M 382.37M 353.38M
Total Assets 982.69M 1.03B 634.09M 633.41M 615.23M 554.83M 449.84M 561.78M 505.90M 464.30M
Current Liabilities 170.41M 150.14M 155.98M 124.91M 122.83M 219.48M 184.60M 191.35M 130.14M 116.81M
Total Liabilities 291.69M 281.17M 261.98M 221.00M 221.64M 347.61M 301.16M 417.19M 352.90M 330.02M
Stockholder' Equity 691.00M 746.95M 372.11M 412.41M 393.59M 207.22M 148.69M 144.59M 153.00M 134.29M
Current Ratio 3.09 3.17 3.26 4.10 4.05 1.85 1.74 2.29 2.94 3.03
TL-to-TA 0.30 0.27 0.41 0.35 0.36 0.63 0.67 0.74 0.70 0.71

Low or No Reinvestment of Profits over the past 10 years

JAKK has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to JAKK operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 382.29M 458.35M 72.84M 119.88M 123.17M 8.84M -48.15M -26.65M -3.39M -2.15M
Retained Earnings Growth - 19.90% -84.11% 64.60% 2.74% -92.83% -644.98% 44.67% 87.27% 36.66%

Loss Making Entity over the past 10 years

JAKK has been unable to maintain profitability. It's Costs of Sales have outstripped Revenue consistently. This is a huge red flag, unless the company has been investing heavily for the future. However, even that is dubious since accurately predicting the future of a company like that is extremely difficult.

$3.99 of every $100 of Revenue have been a loss, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 88.99M 76.06M -385.51M 47.05M 8.47M -104.80M -53.91M 21.51M 23.17M 1.25M
divided by
Revenue 857.09M 903.40M 803.70M 747.27M 677.75M 666.76M 632.93M 810.06M 745.74M 706.60M
Net Profit Margin 10.38% 8.42% -47.97% 6.30% 1.25% -15.72% -8.52% 2.66% 3.11% 0.18%

Inconsistent Gross Profit Margins over the past 10 years

JAKK has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$37.70 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 323.65M 321.21M 202.93M 244.95M 677.75M 197.94M 155.78M 235.81M 228.57M 223.02M
divided by
Revenue 857.09M 903.40M 803.70M 747.27M 677.75M 666.76M 632.93M 810.06M 745.74M 706.60M
Gross Margin 37.76% 35.56% 25.25% 32.78% 100.00% 29.69% 24.61% 29.11% 30.65% 31.56%

High Capital Intensity over the past 10 years

JAKK spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

222.17% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 18.12M 22.27M 16.33M 11.61M 12.46M 21.07M 10.13M 10.45M 18.33M 15.07M
divided by
Net Income 88.99M 76.06M -385.51M 47.05M 8.47M -104.80M -53.91M 21.51M 23.17M 1.25M
Capital Expenditure Ratio 20.36% 29.29% -4.24% 24.67% 147.01% -20.10% -18.79% 48.60% 79.10% 1,206.16%

No Dividend History over the past 10 years

JAKK has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 33.15M 32.64M 27.50M 34.51M 26.89M 23.96M 22.20M 41.52M 43.32M 16.67M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 23.42 20.60 12.16 18.29 14.11 12.32 6.61 6.81 8.01 5.15
Dividend Yield - - - - - - - - - -

Strong History of Stock Buybacks over the past 10 years

JAKK has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 33.15M 32.64M 27.50M 34.51M 26.89M 23.96M 22.20M 41.52M 43.32M 16.67M
Stock Bought Back - 1.57% 18.67% -20.31% 28.33% 12.23% 7.94% -46.53% -4.17% 159.95%
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