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Mattel Inc (MAT)
NASDAQ:MAT
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Mattel
(NASDAQ:MAT)
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Rating:58Neutral
Price Target:
$17.00
▼(-2.35% Downside)
Action:DowngradedDate:02/17/26
The score is held back primarily by weak technicals (downtrend and negative momentum) and mixed fundamentals (flat revenue and margin volatility, with still-meaningful debt). Offsetting this are solid cash generation, a reasonable earnings multiple, and earnings-call initiatives (cost savings, buybacks, and the Mattel 163 acquisition) that support the longer-term setup despite near-term investment-driven pressure.
Positive Factors
Strong free cash flow
Consistent, sizable free cash flow and improved cash conversion (FCF roughly matching net income in 2025) provide durable funding for strategic investments, buybacks, and debt servicing. This cash-generative profile supports flexibility through 2026–2027 and underpins execution of growth initiatives.
IP and digital expansion (Mattel 163)
Acquiring full ownership of Mattel163 secures a high‑scale mobile games channel tied to Mattel IP, diversifies revenue toward digital recurring streams, and accelerates the company’s entertainment/IP strategy. This structural move strengthens long-term brand monetization and cross‑platform engagement beyond toys.
Cost savings and disciplined capital allocation
Delivering sustained OPG savings and a multi‑year $1.5B buyback program demonstrates disciplined capital allocation. Ongoing cost reductions improve structural profitability and free cash flow, while repurchases return capital and reduce share count, supporting longer‑term EPS and shareholder value.
Negative Factors
Margin compression and volatility
Large year‑over‑year margin swings reflect structural pressures—promotional activity, tariff/Fx timing and higher costs—that compress operating leverage. Persistent margin volatility undermines predictable profitability and raises execution risk for management’s mid‑term targets, complicating financial planning through 2026.
Sizable absolute debt burden
Although leverage improved versus 2020, a multibillion dollar debt stock represents a fixed cash outflow and limits flexibility if revenue growth stalls. Interest and maturities constrain optionality for incremental M&A or sustained elevated investments, increasing refinancing and liquidity sensitivity.
Flat revenue and category weakness
Stagnant top‑line and declines in key segments (preschool, dolls) indicate limited organic growth and structural product mix risk. Reliance on a few strong categories (vehicles, games) leaves the company exposed if incumbents weaken, making sustained revenue acceleration dependent on successful new launches and IP monetization.
Mattel (MAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.37B
Dividend YieldN/A
Average Volume (3M)5.63M
Price to Earnings (P/E)13.9
Beta (1Y)0.92
Revenue Growth-2.36%
EPS Growth-16.06%
CountryUS
Employees34,000
SectorConsumer Cyclical
Sector Strength84
IndustryLeisure
Share Statistics
EPS (TTM)0.39
Shares Outstanding310,823,640
10 Day Avg. Volume11,906,692
30 Day Avg. Volume5,627,130
Financial Highlights & Ratios
PEG Ratio-0.74
Price to Book (P/B)2.83
Price to Sales (P/S)1.18
P/FCF Ratio0.00
Enterprise Value/Market Cap1.34
Enterprise Value/Revenue1.34
Enterprise Value/Gross Profit2.75
Enterprise Value/Ebitda8.95
Forecast
1Y Price Target
$18.63Price Target Upside7.01% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)1.3
Revenue Forecast (FY)$5.61B
Mattel Business Overview & Revenue Model
Company DescriptionMattel, Inc., a children's entertainment company, designs and produces toys and consumer products worldwide. The company operates through North America, International, and American Girl segments. It offers dolls and accessories, as well as content, gaming, and lifestyle products for children under the Barbie, Monster High, American Girl, Polly Pocket, Spirit, and Enchantimals brands; dolls and books under the American Girl brand name; die-cast vehicles, tracks, playsets, and accessories for kids of all ages, and collectors under the Hot Wheels, Monster Trucks, Matchbox, CARS, and Mario Kart brand names; and infant, toddler, and preschool products comprising content, toys, live events, and other lifestyle products under the Fisher-Price and Thomas & Friends, Power wheels, and Fireman Sam brands. The company also provides action figures, building sets, and games under the Masters of the Universe, MEGA, UNO, Lightyear, Jurassic World, WWE, and Star Wars brands; and licensor partner brands, including Disney, NBCUniversal, WWE, Microsoft, Nickelodeon, Warner Bros, and Sanrio. It sells its products directly to consumers through its catalog, website, and proprietary retail stores; retailers, including discount and free-standing toy stores, chain stores, department stores, and other retail outlets; and wholesalers, as well as through agents and distributors. Mattel, Inc. was founded in 1945 and is headquartered in El Segundo, California.
How the Company Makes MoneyMattel generates revenue primarily through the sale of its toys and games to retailers, wholesalers, and directly to consumers. The company's revenue model is multifaceted, encompassing several key streams: retail sales from their extensive range of products, licensing agreements for the use of their brand names and characters in various media and merchandise, and direct-to-consumer sales through their online platforms. Significant partnerships with major retailers like Walmart, Target, and Amazon bolster their distribution channels. Additionally, Mattel has engaged in collaborations with entertainment companies to produce movies and shows that enhance brand visibility and drive toy sales, creating a synergistic effect that contributes to its overall earnings.
Mattel Key Performance Indicators (KPIs)
Any
Gross Billings by Category
Reveals the sales performance across different product categories, highlighting which segments are driving revenue and where the company might focus its growth strategies.
Reveals the sales performance across different product categories, highlighting which segments are driving revenue and where the company might focus its growth strategies.
Data provided by:
The Fly
The FlyMattel Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Neutral
The call reflected a mix of operational and strategic progress alongside notable near-term financial and margin challenges. Highlights include solid Q4 top-line growth, strong performance in vehicles, games, and challenger categories, a strategic and accretive acquisition of Mattel 163 to scale digital games, disciplined share repurchases and strong balance sheet metrics, and continued cost-savings momentum. Lowlights centered on US December softness that caused full-year results to underperform expectations, meaningful margin compression (Q4 gross margin down 480 bps), declines in ITPS and certain doll segments for the year, and reduced free cash flow and profitability. Management provided 2026 guidance that factors in investments that will weigh on results in the near term but is positioned to drive accelerated revenue and profit growth in 2027 under a brand-centric, IP-driven strategy.Q4-2025 Updates
Positive Updates
Fourth Quarter Top-Line Growth
Gross billings grew 6% in Q4 (7% North America, 4% International); total company POS grew ~3% for both Q4 and the full year. Q4 net sales were $1.77 billion, up 7% reported (up 5% constant currency).
Strong Vehicle and Challenger Category Performance
Vehicles grew 16% in Q4 and 10% for the full year; Hot Wheels delivered double-digit growth and its eighth consecutive record year. Challenger categories grew 14% in Q4 and 13% for the full year, led by action figures (Jurassic, Minecraft, WWE) and building sets driven by the successful Mattel Brick Shop launch.
Games and Traditional Brands Momentum
UNO sustained momentum, achieving its tenth consecutive quarter of growth, contributing to growth in the games category and broader challenger performance.
Digital and Strategic M&A Progress — Mattel 163 Acquisition
Agreement to acquire NetEase's 50% interest in Mattel 163 for $159 million (JV valued at $380 million). Mattel 163 has ~20 million MAUs and 550 million downloads; acquisition expected to close by end of Q1, be immediately accretive, and contribute an estimated ~$150 million of sales in 2026 (partial year).
Strong Capital Allocation and Share Repurchases
Year-end cash of $1.24 billion after $600 million in repurchases in 2025; repurchased >$1.2 billion of shares over the last three years (~18% of shares outstanding). Board authorized a new $1.5 billion buyback program to be completed by 2028 (including $400M planned in 2026).
Cost-Savings Traction and Operational Positioning
Optimizing-for-profitable-growth (OPG) program delivered $24 million in Q4 and $89 million for the year, with cumulative savings of $172 million since 2024; tracking ahead of the initial $200M target and projecting ~$225M total savings.
2026-2027 Forward Guidance and Strategic Investments
Guidance for 2026: net sales growth 3%-6% (constant currency), adjusted gross margin ~50%, adjusted operating income $550M-$600M, adjusted EPS $1.18-$1.30. Company plans ~$110M of targeted strategic investments (digital games largest) plus ~$40M for performance marketing for two self-published mobile games; expects mid-to-high single-digit revenue growth and double-digit adjusted operating income growth in 2027 (directional).
Balance Sheet and Leverage
Long-term debt $2.33 billion with leverage ratio 2.5x (within target 2.0–2.5x); next debt maturity December 2027, maintaining investment grade after refinancing $600M of debt in Q4.
Negative Updates
Full-Year Results Missed Expectations; US December Softness
Full-year results finished below expectations driven by the US market, where December gross billings grew less than anticipated following a volatile retailer ordering pattern and heightened promotional activity; management noted Q4 acceleration earlier in the quarter but December underperformance materially impacted FY results.
Margin Pressure and Promotional Environment
Adjusted gross margin in Q4 was 46%, down 480 basis points year-over-year; full-year adjusted gross margin was 48.9%, down 200 basis points. Pressures cited: higher discounting, inflation, foreign exchange, and timing lag on tariff cost recognition; inventory management actions (increased promotions) further pressured margins.
Declines in Infant, Toddler & Preschool and Dolls for the Year
ITPS declined 10% in Q4 and 18% for the full year, driven by strategic exits in Baby Gear and Power Wheels and weaker preschool entertainment; dolls declined 7% for the year (Barbie flat in Q4 but down for the year) with non-core segments weighing on performance.
Profitability and Cash Flow Declines
Adjusted operating income for the full year was $620 million, down 16% year-over-year. Adjusted EBITDA declined to $927 million from $1.06 billion. Free cash flow was $411 million vs. $598 million prior year; cash from operations fell to $593 million from $801 million.
Owned Inventory and FX/Tariff Impacts
Owned inventory ended the year at $563 million, a modest increase versus prior year primarily due to tariff-related costs and FX impact; company faced headwinds from shifting shipping patterns (direct import to domestic fulfillment) and tariff timing effects on P&L.
Near-Term Revenue Cadence and Q1 Decline
Company expects a low single-digit decline in Q1 2026 driven by continued shifts from direct import to domestic orders in the US and the timing of new product launches, indicating a near-term cadence headwind to compare against guidance.
Earnings Impact from Strategic Investments in 2026
Planned strategic investments (~$150M total: ~$110M strategic + ~$40M user acquisition/performance marketing) will depress 2026 profitability before expected payback in 2027; management acknowledges bottom-line impact in 2026.
Company Guidance
Mattel guided 2026 net sales growth of 3%–6% in constant currency (with current FX providing ~+1.5 ppt to reported sales), a low‑single‑digit decline in Q1, and an adjusted gross margin of ~50% for the full year; adjusted operating income of $550–$600 million (which assumes ~$110 million of strategic investments plus ~$40 million of digital performance marketing/user acquisition), an adjusted tax rate of ~24%, and adjusted EPS of $1.18–$1.30. Guidance includes a partial‑year contribution from the Mattel 163 acquisition (~$150 million of sales), expects ITPS to be a ~2%–3% headwind to total gross billings, factors ~ $50 million of OPG savings in 2026 (with a total program target of ~$225 million), plans to repurchase $1.5 billion of stock over three years (including $400 million in 2026), and anticipates these 2026 investments to be self‑funding with mid‑to‑high‑single‑digit revenue growth and double‑digit adjusted operating income growth targeted for 2027.Mattel Financial Statement Overview
Summary
Financials look stable but not strong: revenue has been broadly flat since 2022 and profitability has been volatile with a notable 2025 margin step-down. Cash generation is a bright spot (solid operating and free cash flow in 2025), but debt remains sizable despite leverage improvement versus 2020.Income Statement
Revenue has been broadly flat since 2022 (2025: ~$5.35B, up ~2.3% YoY; 2024 slightly down), indicating limited top-line momentum. Profitability is solid but volatile: net margin ranged from ~3.9% (2023) to ~16.5% (2021), easing to ~7.4% in 2025; gross margin remains healthy (~46%–51%) but has softened versus 2024. Operating profitability also stepped down in 2025 (EBITDA margin ~10.2% vs ~18.4% in 2024), suggesting pressure from costs, mix, or spend.63
Positive
Balance Sheet
Leverage has improved meaningfully versus 2020, when debt was very high relative to equity, and equity has grown to ~$2.23B by 2025. However, absolute debt remains sizable (~$2.87B in 2025) and still represents a material financial obligation for a low-growth profile. Returns on equity were strong in 2021 and decent in 2024, but the provided 2025 leverage/return fields appear missing or inconsistent, limiting visibility into the most recent balance-sheet efficiency.58
Neutral
Cash Flow
Cash generation is a relative strength: operating cash flow was strong in 2023–2025 (2025: ~$593M) and free cash flow is also solid (2025: ~$593M) with strong growth in 2025 (+21.5%). Cash conversion improved in 2025 with free cash flow roughly matching net income (about 1.0x), supporting earnings quality. The main weakness is variability: operating cash flow and free cash flow declined in 2024 vs 2023, reflecting working-capital and/or spending swings.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.35B | 5.38B | 5.44B | 5.43B | 5.46B |
| Gross Profit | 2.61B | 2.73B | 2.58B | 2.48B | 2.63B |
| EBITDA | 788.00M | 987.23M | 818.37M | 875.37M | 956.38M |
| Net Income | 397.60M | 541.82M | 214.35M | 393.91M | 902.99M |
Balance Sheet | |||||
| Total Assets | 6.64B | 6.54B | 6.44B | 6.18B | 6.39B |
| Cash, Cash Equivalents and Short-Term Investments | 1.24B | 1.39B | 1.26B | 761.24M | 731.36M |
| Total Debt | 2.87B | 2.69B | 2.67B | 2.67B | 2.93B |
| Total Liabilities | 4.41B | 4.28B | 4.29B | 4.12B | 4.83B |
| Stockholders Equity | 2.23B | 2.26B | 2.15B | 2.06B | 1.57B |
Cash Flow | |||||
| Free Cash Flow | 0.00 | 597.95M | 709.49M | 256.34M | 334.11M |
| Operating Cash Flow | 593.30M | 800.57M | 869.79M | 442.84M | 485.46M |
| Investing Cash Flow | -154.90M | -189.04M | -142.42M | -144.22M | -105.10M |
| Financing Cash Flow | -583.30M | -449.35M | -226.57M | -260.64M | -402.07M |
Mattel Technical Analysis
Negative
17.41
Price Trends
20.21
Negative
19.56
Negative
19.06
Negative
Market Momentum
-1.01
Positive
35.80
Neutral
33.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MAT, the sentiment is Negative. The current price of 17.41 is below the 20-day moving average (MA) of 19.48, below the 50-day MA of 20.21, and below the 200-day MA of 19.06, indicating a bearish trend. The MACD of -1.01 indicates Positive momentum. The RSI at 35.80 is Neutral, neither overbought nor oversold. The STOCH value of 33.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MAT.
Mattel Risk Analysis
Mattel disclosed 37 risk factors in its most recent earnings report. Mattel 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
Mattel Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $5.87B | 27.38 | 25.91% | 1.15% | 4.20% | 24.12% | |
67 Neutral | $14.20B | -42.97 | -37.42% | 3.44% | 0.87% | 14.02% | |
67 Neutral | $3.85B | 24.49 | 23.79% | ― | 1.56% | -17.21% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $5.37B | 13.87 | 17.69% | ― | -2.36% | -16.06% | |
52 Neutral | $199.81M | 36.05 | 4.03% | 5.97% | -16.49% | -81.62% | |
50 Neutral | $233.75M | -3.47 | -32.77% | ― | -11.32% | -165.08% |
* Consumer Cyclical Sector Average
MAT
Mattel
17.41
-3.78
-17.84%
GOLF
Acushnet Holdings
102.17
36.88
56.49%
HAS
Hasbro
101.46
37.43
58.44%
JAKK
Jakks Pacific
22.47
-4.95
-18.04%
FNKO
Funko
5.24
-7.89
-60.09%
YETI
Yeti Holdings
47.68
10.58
28.52%
Mattel Corporate Events
Business Operations and StrategyStock BuybackFinancial DisclosuresM&A Transactions
Mattel Unveils New Buyback Plan Amid Mixed 2025 Results
Neutral
Feb 10, 2026
On February 10, 2026, Mattel reported fourth-quarter 2025 net sales of $1.77 billion, up 7% year over year, while net income fell to $106 million as gross margins compressed on higher discounts, inflation and FX headwinds. Full-year 2025 net sales slipped 1% to $5.35 billion with net income down to $398 million, as weakness in North American dolls and preschool lines offset strength in Hot Wheels and action figures.
The company highlighted $600 million of 2025 share repurchases and progress on a cost-savings program, alongside a new $1.5 billion share repurchase authorization expected to run through 2028. Mattel is deepening its IP and entertainment push with the planned full acquisition of the Mattel163 mobile games studio and $150 million in strategic investments, moves that may pressure near-term earnings but are aimed at reinforcing its competitive position and driving growth in 2027 and beyond.
The most recent analyst rating on (MAT) stock is a Hold with a $22.00 price target. To see the full list of analyst forecasts on Mattel stock, see the MAT Stock Forecast page.
Business Operations and StrategyPrivate Placements and Financing
Mattel Issues $600M Senior Notes for Debt Refinancing
Neutral
Nov 17, 2025
On November 17, 2025, Mattel, Inc. issued $600 million in 5.000% Senior Notes due in 2030 to refinance its outstanding 3.375% Senior Notes due 2026. The issuance of these notes is part of Mattel’s strategic financial management to optimize its debt structure, potentially impacting its operational flexibility and financial stability by replacing existing debt with a new financial instrument.
The most recent analyst rating on (MAT) stock is a Buy with a $27.00 price target. To see the full list of analyst forecasts on Mattel stock, see the MAT 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.