MAT Stock: Why Mattel Is Up 16% In the Last Month?
24 Julho 2023 - 7:18AM
Finscreener.org
Shares of
Mattel (NASDAQ: MAT),
a children’s and family entertainment company, have surged over 17%
in the last month due to the optimism surrounding the release of
the Barbie movie. Mattel designs and manufactures toys and consumer
products, including brands such as Barbie, American Girl, Disney
Princess, and Frozen.
Valued at a market cap of $7.5
billion, Mattel stock has returned 36% in the last five years.
However, it has trailed the broader markets significantly in the
last decade, falling nearly 50% since July 2013. Let’s see if it
makes sense to invest in MAT stock right now.
Barbie grosses $155 million in its opening
weekend
According to a
report from Variety, the Barbie movie, a fantasy
comedy, smashed expectations to collect $155 million in its opening
weekend. If we include international box office numbers, Barbie
raked in a total of $337 million, a record in the post-pandemic
era.
Barbie has been an extremely
popular doll among kids around the world. It has captured the
customerU+02019s imagination for several decades by introducing fun
accessories in clothing, a hair salon, and even the Dreamhouse. A
few months back, Mattel also launched a Barbie with Down syndrome
to make it more inclusive.
Mattel launched its film division
five years back to benefit from its broad portfolio of intellectual
properties (IPs) such as Barbie, Hot Wheels, and American Girl
dolls. This move will help the company unlock another significant
revenue stream allowing Mattel to pivot from just manufacturing
toys, making it a comprehensive entertainment entity. The
monetization of its IPs will enable Mattel to create a flywheel
effect and bring in millions of dollars in additional toy
sales.
An article from the New Yorker
stated Mattel has 45 movies in different stages of development as
it aims to monetize further IPs, including He-Man, Hot Wheels, and
even the card game UNO.
A look at MattelU+02019s stock price and its
financials
Mattel increased sales from $4.5
billion in 2019 to $5.43 billion in 2022. But toy companies globally have
struggled in recent months as the pandemic boom faded and consumer
spending shifted away from at-home entertainment
options.
In Q1 of 2023, Mattel’s sales
fell by 22%. It reported an operating loss of $87 million, compared
to a loss of $10 million in the year-ago period. It expects sales
to be flat at $5.4 billion with adjusted earnings between $1.10 and
$1.20 per share. In 2022, Mattel’s adjusted earnings stood at $1.25
per share.
Priced at 18 times forward
earnings, Mattel stock is not too cheap. However, it wrestled with
consistent losses before COVID-19, and the business is now showing
signs of recovery.
The final takeaway
Mattel struggled for several
years due to a weak balance sheet, tepid retail sales and the
bankruptcy of Toys R Us in 2017. Its revenue and share prices have
experienced a free fall in the lastten0 years, burning investor
wealth at an alarming rate.
But given the challenges, Mattel
stock is well positioned to stage a comeback, especially if its
movie-making strategy pays off.
Analysts tracking MAT stock
expect shares to gain another 8% in the next 12 months. Expect
Mattel stock to gain significant momentum if the Barbie movie
success translates into additional doll sales.
Mattel (NASDAQ:MAT)
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