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Jakks Pacific (JAKK)
NASDAQ:JAKK
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Jakks Pacific
(NASDAQ:JAKK)
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Rating:52Neutral
Price Target:
$22.50
▲(8.80% Upside)
Action:ReiteratedDate:02/21/26
JAKK scores in the low-50s primarily due to weakened TTM financial performance (sharp revenue decline, margin compression, and slightly negative free cash flow) despite a relatively solid balance sheet. Technicals are modestly constructive with price above key moving averages, while valuation is offsetting (high dividend yield but elevated P/E). Earnings call commentary supports cautious optimism on margin focus and modest 2026 growth, but tariffs and top-line volatility remain key risks.
Positive Factors
Debt-Free Balance Sheet
Maintaining a debt-free balance sheet with $54M in cash gives Jakks durable financial flexibility. This reduces refinancing risk during revenue volatility, supports continued dividends and selective investment in product development and the 2027 strategic initiative without increasing leverage.
Gross Margin Expansion
A multi-year high gross margin (32.4%) driven by better costing and inventory discipline strengthens intrinsic profitability. Sustained margin expansion can offset top-line pressure, support operating leverage and fund reinvestment even if revenue growth remains modest over the next several quarters.
Strong Licensing & Product Wins
Renewed/licensed relationships with major IP holders and successful film tie-ins create durable product pipelines and retail pull-through. These partnerships provide recurring seasonal and event-driven opportunities, supporting international expansion and predictable catalog refreshes into 2027.
Negative Factors
Sharp Revenue Decline
A ~63% TTM revenue drop reflects meaningful demand disruption that erodes scale economics. Prolonged top-line weakness compresses fixed-cost absorption, limits reinvestment capacity, and increases execution risk for strategic plans and dividend continuity if recovery stalls.
Weak Cash Generation
Free cash flow turning slightly negative and sharply reduced operating cash vs. prior years weakens internal funding ability. Reduced cash conversion elevates reliance on working-capital swings and constrains the company's ability to consistently finance product launches, capex and shareholder returns.
Tariff-Driven Demand Volatility
Material tariffs materially disrupted order patterns and depressed reorders, creating structural top-line volatility. Persistent trade-policy cost burdens reduce pricing flexibility, raise landed costs, and can continue to suppress unit volumes and retailer replenishment over multiple selling seasons.
Jakks Pacific (JAKK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$236.67M
Dividend Yield5.97%
Average Volume (3M)155.69K
Price to Earnings (P/E)24.0
Beta (1Y)0.86
Revenue Growth-16.49%
EPS Growth-81.62%
CountryUS
Employees680
SectorConsumer Cyclical
Sector Strength84
IndustryLeisure
Share Statistics
EPS (TTM)-0.18
Shares Outstanding11,444,411
10 Day Avg. Volume257,855
30 Day Avg. Volume155,695
Financial Highlights & Ratios
PEG Ratio-0.26
Price to Book (P/B)0.76
Price to Sales (P/S)0.33
P/FCF Ratio-176.29
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue0.41
Enterprise Value/Gross Profit1.28
Enterprise Value/Ebitda9.29
Forecast
1Y Price Target
$27.00Price Target Upside30.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.77
Revenue Forecast (FY)$597.59M
Jakks Pacific Business Overview & Revenue Model
Company DescriptionJAKKS Pacific, Inc. develops, produces, markets, sells, and distributes toys, consumables, and electronics and related products worldwide. It operates in two segments, Toys/Consumer Products and Costumes. The company offers action figures and accessories, such as licensed characters; toy vehicles and accessories; dolls and accessories, including small, large, fashion, and baby dolls based on licenses, as well as infant and pre-school products; private label products; and foot-to-floor ride-on products, inflatable environments, tents, and wagons. The company also provides role play, dress-up, pretend play, and novelty products for boys and girls based on brands and entertainment properties, as well as on its own proprietary brands; and indoor and outdoor kids' furniture, activity trays and tables, room décor, kiddie pools, and seasonal and outdoor products. In addition, it offers Halloween and everyday costumes for various ages based on licensed and proprietary non-licensed brands, and related Halloween accessories; outdoor activity toys; and junior sports toys, including hyper-charged balls, sport sets, and toy hoops. The company sells its products through in-house sales staff and independent sales representatives to toy and mass-market retail chain stores, department stores, office supply stores, drug and grocery store chains, club stores, value-oriented dollar stores, toy specialty stores, and wholesalers. JAKKS Pacific, Inc. was incorporated in 1995 and is headquartered in Santa Monica, California.
How the Company Makes MoneyJakks Pacific generates revenue primarily through the sale of its toys and consumer products, which are distributed to retailers worldwide. The company's revenue model is heavily reliant on licensing agreements with major entertainment franchises, enabling them to create products based on popular characters and themes. Key revenue streams include direct sales to retailers, wholesale distribution, and online sales through e-commerce platforms. Significant partnerships with major studios and licensors contribute to the company's earnings by ensuring a steady flow of new, innovative products that align with consumer trends and seasonal demand. Additionally, Jakks Pacific often engages in promotional campaigns and collaborations that enhance brand visibility and drive sales, further bolstering its financial performance.
Jakks Pacific Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Neutral
The call conveyed a balanced picture: management highlighted meaningful operational and margin improvements (record-level gross margin, improved Q4 EBITDA, stronger international growth, disciplined SG&A, dividend continuity and a debt-free balance sheet) and positive product/brand momentum (Super Mario Galaxy, Sonic, Disney Darlings). However, material top-line pressure from tariff-driven demand disruption led to a significant full-year decline in Toys/Consumer Products sales (−19%), lower EPS and compressed EBITDA versus the prior year. Tariffs and sales volatility remain the primary near-term headwinds even as the company positions for low-to-mid single-digit revenue growth and margin expansion in 2026 and strategic launches in 2027.Q4-2025 Updates
Positive Updates
Gross Margin Expansion to Multi-Year High
Full year gross margin improved to 32.4% (highest in over 15 years), up from 30.8% in prior year and 31.4% in 2023; Q4 gross margin dollars increased ~11% year-over-year driven by better costing and improved inventory management.
Reduced Quarterly Adjusted EBITDA Loss
Q4 adjusted EBITDA loss narrowed to $3.8 million from a $10.2 million loss in Q4 2024; trailing 12-month adjusted EBITDA finished at $35.4 million.
Positive Cash Flow and Dividend Continuation
Generated over $8 million in cash from operations in 2025, returned $1.00 per share to shareholders during the year, funded $11.2 million in common dividends, and Board approved a Q1 2026 dividend of $0.25 per share.
Debt-Free Balance Sheet with Solid Cash Position
Ended year with $54 million in cash and a debt-free balance sheet (cash down from $70 million year-over-year but company remains unlevered).
International Growth — Rest of World Strength
Q4 Rest of World sales increased 9.9% to $41.0 million; full year Rest of World sales were $154.1 million, up 5.5% year-over-year, led by a 14% increase in Europe to $81.4 million.
Category/Brand Wins and Product Momentum
Action Play & Collectibles grew 19% year-over-year in Q4 driven by FOB shipments tied to the Super Mario Galaxy film; successful product debuts and expanded distribution for Sonic and Disney Darlings with positive retailer feedback (Nuremberg Toy Fair showroom debut).
Inventory Discipline in the U.S.
U.S.-held inventory declined 18% year-over-year to the lowest year-end level in over 10 years, reflecting tighter inventory management and targeted replenishment.
Operating Efficiency Gains
Full year SG&A declined ~1% with selling expense down 8% and G&A roughly flat, contributing to margin preservation while funding product development and new initiatives.
Negative Updates
Significant Full-Year Toys/Consumer Products Decline
Full-year Toys/Consumer Products sales declined 19% (with all three Toys/Consumer Products divisions down between 9% and 23%), and Costume business down 10% for the full year, driven largely by tariff-induced order pattern disruption and higher consumer prices.
Overall Q4 and U.S. Sales Pressure
Total company Q4 sales were $127.1 million, down 2.8% year-over-year (roughly flat to Q4 2023) and Q4 U.S. sales declined 7.8% to $86.2 million, attributed to tariff-driven slower second-half sell-through and lower replenishment.
Earnings and Margin Compression Versus Prior Year
Trailing 12-month EBITDA fell to $35.4 million from $59.3 million prior year; full year operating margin fell to 2.5% from 5.7%, and adjusted EBITDA margin declined to 6.2% from 8.6%.
Decline in Adjusted EPS
Full year adjusted EPS decreased to $1.62 from $3.79 in 2024; Q4 adjusted loss was $0.18 per share versus a $0.67 per-share loss in Q4 2024 (improvement but still lower annual EPS).
Tariff-Related Headwinds Impacting Demand
Company paid roughly $12 million in U.S. tariffs in 2025 and estimates U.S. FOB customers paid nearly $50 million in tariffs on JAKKS and Disguise product in 2025, which management believes reduced customer reorders and materially depressed potential revenue and unit volumes.
Decline in Cash and Slight Inventory Increase Overall
Cash balance declined to $54 million from $70 million year-over-year; consolidated inventory rose slightly to just under $60 million (from $53 million) driven by expanded distribution in Europe and Mexico.
Persistent Royalty and Mix Pressures
Royalty expenses increased due to minimum unearned royalty payments and mix impacts tied to significant sales reductions, putting additional pressure on margins despite lower product costs.
Sales Volatility and Uncertain Near-Term Trends
Management noted Q4 improvements were influenced by timing (e.g., FOB shipments for film tie-ins) and did not indicate a clear reversal of the volatile customer behavior seen through Q2–Q3, leaving near-term top-line visibility limited.
Company Guidance
Management’s forward-looking frame is modest and margin-focused: they expect low- to mid-single-digit top-line growth in 2026 while prioritizing gross‑margin expansion and SG&A containment as they prepare for major 2027 initiatives, and the Board approved a Q1 dividend of $0.25/share (record Feb. 27, payable Mar. 30) following a $1.00/share return in 2025. They pointed to 2025 as the baseline — full‑year gross margin 32.4% (highest in >15 years), adjusted EBITDA margin 6.2% (down from 8.6%), operating margin 2.5% (vs. 5.7%), trailing‑12‑month EBITDA $35.4M (vs. $59.3M), Q4 adjusted EBITDA loss $3.8M (vs. $10.2M), Q4 adjusted EPS loss $0.18 (vs. $0.67), and full‑year adjusted EPS $1.62 (vs. $3.79) — and stressed balance‑sheet and working‑capital positions ($54M cash, inventory just under $60M with U.S. inventory down 18% YoY, ~11.5M diluted shares, >$8M cash flow from operations, and $11.2M of dividends funded in 2025). They also reiterated tariff headwinds (roughly $12M in U.S. tariffs paid by the company and an estimated ~$50M in tariffs borne by U.S. FOB customers in 2025) and said they will seek to grow revenue modestly while improving margins via better costing, inventory management and selective investments.Jakks Pacific Financial Statement Overview
Summary
Mixed fundamentals: the balance sheet is relatively solid with modest leverage (debt ~0.21x equity) and positive ROE (~4%), but TTM operating results weakened sharply with revenue down ~63% YoY, compressed net margins (~1.7%), and free cash flow turning slightly negative (about -$1.1M) despite positive operating cash flow (~$8.5M).Income Statement
Profitability and growth have weakened meaningfully in TTM (Trailing-Twelve-Months). Revenue fell sharply (down ~63% versus the prior year), and margins compressed versus 2023–2024: net margin is ~1.7% in TTM versus ~4.9% in 2024 and ~5.4% in 2023. The company remains profitable in TTM, but earnings power has clearly downshifted from the stronger 2022–2024 period, when operating profitability and net income were materially higher.46
Neutral
Balance Sheet
The balance sheet looks relatively solid with modest leverage: debt is ~0.21x equity in TTM (Trailing-Twelve-Months), improved from higher leverage in earlier years (notably 2020–2021). Equity is sizable versus total assets, and returns on equity are positive in TTM (~4%) after strong levels in 2022–2024, though the step-down in returns signals reduced profitability rather than balance-sheet stress.72
Positive
Cash Flow
Cash generation has deteriorated sharply in TTM (Trailing-Twelve-Months). Operating cash flow is positive (~$8.5M) but far below prior years (e.g., ~$38.9M in 2024 and ~$66.4M in 2023), and free cash flow turned slightly negative (about -$1.1M). Cash conversion also looks weaker versus the last several annual periods, increasing reliance on working capital swings and reducing flexibility if the earnings slowdown persists.38
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 570.67M | 691.04M | 711.56M | 796.19M | 621.12M |
| Gross Profit | 185.08M | 213.02M | 223.35M | 211.29M | 182.96M |
| EBITDA | 25.47M | 50.87M | 59.98M | 71.84M | 18.69M |
| Net Income | 9.87M | 33.92M | 38.41M | 91.41M | -6.01M |
Balance Sheet | |||||
| Total Assets | 442.20M | 444.87M | 398.95M | 405.34M | 357.05M |
| Cash, Cash Equivalents and Short-Term Investments | 54.07M | 69.94M | 72.55M | 85.30M | 44.52M |
| Total Debt | 92.94M | 56.52M | 24.05M | 87.76M | 114.03M |
| Total Liabilities | 193.09M | 204.04M | 202.84M | 258.64M | 299.15M |
| Stockholders Equity | 249.10M | 240.33M | 195.41M | 145.70M | 56.57M |
Cash Flow | |||||
| Free Cash Flow | -1.07M | 27.70M | 57.50M | 75.71M | -14.10M |
| Operating Cash Flow | 8.49M | 38.95M | 66.40M | 86.10M | -5.88M |
| Investing Cash Flow | -12.34M | -12.89M | -8.91M | -10.39M | -8.19M |
| Financing Cash Flow | 0.00 | -26.92M | -72.29M | -31.02M | -32.79M |
Jakks Pacific Technical Analysis
Positive
20.68
Price Trends
18.46
Positive
17.67
Positive
18.06
Positive
Market Momentum
0.97
Negative
58.98
Neutral
62.12
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JAKK, the sentiment is Positive. The current price of 20.68 is above the 20-day moving average (MA) of 19.36, above the 50-day MA of 18.46, and above the 200-day MA of 18.06, indicating a bullish trend. The MACD of 0.97 indicates Negative momentum. The RSI at 58.98 is Neutral, neither overbought nor oversold. The STOCH value of 62.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JAKK.
Jakks Pacific Risk Analysis
Jakks Pacific disclosed 31 risk factors in its most recent earnings report. Jakks Pacific reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Jakks Pacific Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $13.74B | -24.06 | ― | 3.44% | 0.87% | 14.02% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $4.88B | 12.82 | 17.69% | ― | -2.36% | -16.06% | |
52 Neutral | $236.67M | 24.05 | 4.03% | 5.97% | -16.49% | -81.62% | |
50 Neutral | $253.14M | -3.59 | -32.77% | ― | -11.32% | -165.08% | |
47 Neutral | $197.20M | -5.64 | ― | ― | 60.60% | 66.17% | |
46 Neutral | $20.68M | ― | -5.86% | ― | 39.47% | 31.39% |
* Consumer Cyclical Sector Average
JAKK
Jakks Pacific
20.68
-3.95
-16.03%
HAS
Hasbro
97.63
36.77
60.42%
MAT
Mattel
16.14
-4.43
-21.54%
FNKO
Funko
4.57
-6.68
-59.38%
DOGZ
Dogness (International)
1.47
-27.04
-94.84%
PLBY
Playboy
1.83
0.48
35.56%
Jakks Pacific Corporate Events
Dividends
Jakks Pacific Declares Quarterly Cash Dividend to Shareholders
Positive
Feb 20, 2026
On February 18, 2026, Jakks Pacific’s board of directors declared a quarterly cash dividend of $0.25 per common share, reinforcing its practice of returning capital to shareholders and signaling confidence in its ongoing cash generation and balance sheet strength. The dividend is scheduled to be paid on March 30, 2026, to shareholders of record as of the close of business on February 27, 2026, providing a defined timeline for investors to qualify for the payout.
The most recent analyst rating on (JAKK) stock is a Hold with a $19.00 price target. To see the full list of analyst forecasts on Jakks Pacific stock, see the JAKK Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.