JAKKS Pacific, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

A week ago, JAKKS Pacific, Inc. (NASDAQ:JAKK) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 12% higher than the analysts had forecast, at US$254m, while EPS were US$2.48 beating analyst models by 27%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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After the latest results, the twin analysts covering JAKKS Pacific are now predicting revenues of US$676.2m in 2027. If met, this would reflect a modest 7.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 59% to US$3.63. In the lead-up to this report, the analysts had been modelling revenues of US$651.2m and earnings per share (EPS) of US$2.74 in 2027. So it seems there's been a definite increase in optimism about JAKKS Pacific's future following the latest results, with a massive increase in the earnings per share forecasts in particular.

Check out our latest analysis for JAKKS Pacific

It will come as no surprise to learn that the analysts have increased their price target for JAKKS Pacific 70% to US$48.50on the back of these upgrades.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that JAKKS Pacific's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6.2% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 3.4% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.1% annually. Not only are JAKKS Pacific's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around JAKKS Pacific's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for JAKKS Pacific going out as far as 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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