QS Research · Michael Burry's Scion Capital analyst template · 2006
JAKKS PACIFIC INC (JAKK)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case +23% · downside -51% · upside +60%
The market is paying up for a recovery: JAKK is near its 52-week high after a +100.8% one-year move, and the given TTM EV/EBITDA is 10.2x on $33.8M EBITDA. On normalized FY2020-FY2025 EBITDA of ~$47.7M, the company's own 10.2x multiple gives ~$41.4, or +23% versus $33.64, while the high-peer 13.2x case gives ~$53.9 (+60%) and the low-peer 4.2x downside gives ~$16.6 (-51%). The long rule is not met because base upside is below +30% and downside is worse than -25%; the short rule is not met because base case is not -30% or lower. This is a watch: cheap on normalized FCF with real Q3 2026 momentum and licensing catalysts, but no margin of safety at today's price.
Key numbers
- Share price: $33.64
- Market cap: $387.5M
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $627.2M
- EV / EBITDA (TTM): 10.2x
- P/E (TTM): 14.8x
- Price / book: 1.40x
The 15 boxes
- ✓ 1. Long-form business notes
JAKKS makes money by designing, producing and selling licensed and proprietary toys, costumes and related kid-targeted products through mass retail; Target and Walmart were 26.6% and 26.1% of FY2025 net sales, and outside-US sales were 27.0% of the total. The FY2025 10-K reports two segments, Toys/Consumer Products and Costumes, while the FY2020 10-K called the second segment Halloween. XBRL shows FY2025 revenue of $570.7M and operating income of $14.2M, down from the FY2022 peak of $796.2M revenue and $61.0M operating income; operating cash flow also weakened to $8.5M in FY2025. Since FY2020, international mix rose from 18.4% to 27.0%, total equity and diluted shares increased, and Meisheng's stake fell from 9.2% to 4.8%.
- ✓ 2. Competitive advantage
No durable advantage is visible in the sources: JAKKS competes head-on with Mattel and Hasbro and with Rubies II in costumes, while its own scale, resources and brand ownership are described as inferior, and substantially all net sales come from brands licensed from others carrying fixed minimum royalties. The numbers fit that picture: revenue fell from $796.2M in FY2022 to $570.7M in FY2025, operating income from $61.0M to $14.2M and operating cash flow from $86.1M to $8.5M, with FY2025 operating cash flow of $8.5M below capex of $9.6M. Two customers, Target and Walmart, were 26.6% and 26.1% of 2025 net sales on cancellable purchase orders, so there is no visible switching cost or pricing power either.
- ✓ 3. 10-Q takeaways
The Sep 30, 2026 10-Q shows Q3 2026 sales up in both Toys/Consumer Products and Costumes, with gross margin 32.1% vs 32.0% and operating margin 14.7% vs 13.9%. Nine-month operating cash turned positive at $17.4M, while $7.0M of nine-month other income came from June 2026 import-tariff refunds, outside operating income. The 10-Q reports no material risk-factor changes from the 2025 10-K, while the computed 2025 10-K diff flagged 27 new or rewritten risk paragraphs.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.