What Happened?
Shares of toy manufacturing and entertainment company (NASDAQ:MAT) jumped 16.5% in the morning session after the company reported fourth-quarter results that significantly exceeded analysts' EPS and EBITDA expectations. Revenue also exceeded expectations, though by a narrow margin, as sales increased 1.6% year-on-year. Additionally, its revenue and full-year EPS guidance outperformed Wall Street estimates. Zooming out, we think this was a good quarter with some key areas of upside.
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What The Market Is Telling Us
Mattel’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Mattel and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 5.5% on the news that the company reported first quarter results that blew past analysts' EPS expectations. Its operating margin also outperformed Wall Street's estimates.
On the other hand, its revenue unfortunately missed. Looking ahead, full year EPS guidance was line with expectations. Overall, this quarter's results seemed fairly positive and shareholders should feel optimistic.
Mattel is up 16.1% since the beginning of the year, and at $20.59 per share, has set a new 52-week high. Investors who bought $1,000 worth of Mattel’s shares 5 years ago would now be looking at an investment worth $1,451.
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