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JAKKS Pacific - AI Stock Analysis

Analysis generated July 8, 2024

JAKKS Pacific, Inc. (NASDAQ: JAKK) is a prominent player in the toy and consumer products industry. The company designs, produces, and markets a range of toys, electronics, and various consumer products. Known for its innovative products and strong collaborations with major entertainment and media companies, JAKKS Pacific has built a reputation in the industry. This breadth allows them to target a diverse age group, from young children to older audiences, with their collectible items. However, like many companies, JAKKS has faced significant challenges in an ever-evolving market influenced by consumer preferences and economic conditions.

Fundamental Analysis

JAKKS Pacific recently reported revenues of $90M for the last quarter. This figure represents a 29.87% decline from the previous quarter, signaling potential issues with sales or external market conditions. Compared to the same quarter last year, revenues declined by 13.94%, reflecting persistent operational challenges.

The company posted a net income of $15M for the last quarter. This outcome is concerning, as there was a 33.47% decrease compared to the previous quarter and a significant 173.01% decrease year-over-year. The sharp decline in net income might be indicative of higher operating costs or reduced margins.

EBITDA, a crucial measure of operational efficiency, was reported at $21M. This also showed a decline of 33.68% quarter-over-quarter and a staggering 484.88% decrease compared to the same quarter last year. Given EBITDA's role in indicating the core profitability of the company, these numbers are a cause for alarm.

On a more positive note, JAKKS Pacific's current P/E ratio stands at 6.42, which is relatively low. A low P/E ratio can suggest that a stock is undervalued, possibly offering a buying opportunity for investors looking for value stocks.

Technical Analysis

Currently, JAKKS Pacific's stock price is $17.91. This price reflects a 1.49% decrease compared to a month ago, indicating some short-term concerns. Additionally, the stock price has decreased by 9.59% over the past year, which could point to a broader, longer-term issue.

From a trend perspective, the stock is displaying a neutral trend, with the current SMA10 at $17.95 being equal to the previous SMA10. This indicates there are no significant momentum shifts in the short term.

The RSI is currently at 10.7, which suggests that the stock is in an oversold condition. An RSI below 30 is typically seen as a bullish signal, suggesting a potential turnaround or buying opportunity might be on the horizon.

Alternative Data Analysis

Recent alternative data provides some intriguing insights. JAKKS Pacific has increased its job postings by 80% over the last couple of months, indicating potential growth or expansion plans. This is generally a positive sign, suggesting the company may be gearing up for future developments.

Employee sentiment within the company remains neutral, suggesting a stable internal environment without any significant morale issues.

The company's website traffic has seen a 31% increase in visitors, which is a bullish indicator. Increased web traffic can often lead to higher customer acquisitions and sales, so this trend is a positive signal.

On social media, JAKKS Pacific's Instagram followers increased by 3% to 54,000, reflecting growing interest in the company. However, their Twitter follower count of 23,000 has remained stagnant, indicating limited engagement on that platform.

Finally, the AltIndex AI score, which aggregates fundamental, technical, and alternative data to predict stock performance, gives JAKKS Pacific a score of 63. This is a buy signal, suggesting the stock might be poised for future gains.

Conclusion and Recommendation

In conclusion, JAKKS Pacific faces several challenges, as indicated by the significant declines in revenue, net income, and EBITDA. These declines might instill caution among potential investors. However, the low P/E ratio and oversold RSI suggest that the stock might currently be undervalued, offering a potential buying opportunity.

The increase in job postings and web traffic, along with a generally positive AI score, lends additional credibility to a bullish perspective. Therefore, while there are evident risks, investors with a higher risk tolerance might find JAKKS Pacific an attractive purchase at this time.

Based on the analysis, my recommendation is a cautious buy. Investors should closely monitor upcoming earnings reports and market conditions to reassess their positions as needed.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.

The analytics provided are estimates and not a substitute for professional advice. All investments involve risks, including possible capital loss.
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