Does Mattel Inc. (MAT) offer a good opportunity for investors?

Mattel Inc. (NASDAQ: MAT) stock fell -2.14% on Thursday to $17.86 against a previous-day closing price of $18.25. With 1.76 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.67 million shares. During the session, the Leisure company that operates in wider Consumer Cyclical sector, reached to the highest price of $18.30 whereas the lowest price it dropped to was $17.84. The 52-week range on MAT shows that it touched its highest point at $25.56 and its lowest point at $15.36 during that stretch. It currently has a 1-year price target of $22.90. Beta for the stock currently stands at 1.16.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of MAT was down-trending over the past week, with a drop of -6.05%, but this was up by 5.24% over a month. Three-month performance dropped to -2.14% while six-month performance rose 0.79%. The stock lost -17.39% in the past year, while it has gained 0.11% so far this year. A look at the trailing 12-month EPS for MAT yields 0.74 with Next year EPS estimates of 1.49. For the next quarter, that number is -0.02. This implies an EPS growth rate of -56.70% for this year and 27.02% for next year. EPS is expected to grow by 5.10% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 18.40%.

Float and Shares Shorts:

At present, 354.94 million MAT shares are outstanding with a float of 352.67 million shares on hand for trading. On May 14, 2023, short shares totaled 10.95 million, which was 3.09% higher than short shares on Apr 13, 2023. In addition to Mr. Ynon Kreiz as the firm’s Exec. Chairman & CEO, Mr. Richard Dickson serves as its Pres & COO.

Institutional Ownership:

Through their ownership of 100.22% of MAT’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 67.80% of MAT, in contrast to 29.26% held by mutual funds. Shares owned by individuals account for 1.80%. As the largest shareholder in MAT with 12.27% of the stake, PRIMECAP Management Co. holds 43,647,759 shares worth 43,647,759. A second-largest stockholder of MAT, Edgepoint Investment Group, Inc., holds 42,614,431 shares, controlling over 11.98% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in MAT, holding 34,105,676 shares or 9.59% stake. With a 7.68% stake in MAT, the Vanguard PRIMECAP Fund is the largest stakeholder. A total of 27,317,838 shares are owned by the mutual fund manager. The American Funds Growth Fund of Ame, which owns about 6.16% of MAT stock, is the second-largest Mutual Fund holder. It holds 21,925,400 shares valued at 394.66 million. EdgePoint Global Portfolio holds 5.11% of the stake in MAT, owning 18,157,441 shares worth 326.83 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, MAT reported revenue of $1.24B and operating income of $125.10M. The EBITDA in the recently reported quarter was $119.90M and diluted EPS was $0.18.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for MAT since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With MAT analysts setting a high price target of $27.00 and a low target of $18.00, the average target price over the next 12 months is $23.00. Based on these targets, MAT could surge 51.18% to reach the target high and rise by 0.78% to reach the target low. Reaching the average price target will result in a growth of 28.78% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded MAT stock several times over the past three months with 7 Buys and 7 Sells. In these transactions, 66,259 shares were bought while 30,768 shares were sold. The number of buy transactions has increased to 34 while that of sell transactions has risen to 33 over the past year. The total number of shares bought during that period was 1,884,362 while 888,730 shares were sold.

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