Today's notable surge in Hasbro's stock price.
Hasbro, with a ticker symbol HAS and a 13.05% surge, skyrocketed a whopping 13.2% by 1:25 p.m. ET on Thursday, leaving analysts in awe. The toymaker was expected to earn $0.35 per share, adjusted for one-time items, on sales of over $1 billion. However, Hasbro smashed these predictions, reporting an earnings per share of $0.46 and revenues of $1.1 billion.
A Mixed Bag of Results
While the figures were impressive, Hasbro wasn't entirely unscathed. Sales took a 15% hit year over year, predominantly due to the company offloading its eOne media and production business. Interestingly, Hasbro's Wizards of the Coast (WotC) subsidiary, famed for its popular franchises such as Dungeons & Dragons and Magic: the Gathering, experienced a 7% decline in sales.
Despite these setbacks, Hasbro's 'adjusted' profits were positive and ahead of expectations. However, when calculated according to GAAP, the company reported a loss for the quarter, amounting to $0.25 per share.
For the full year, Hasbro's sales dipped by 17% (again, attributable to eOne's exit), but on the upside, WotC saw a 4% sales surge. The company's earnings for the year stood at $2.75 per share.
Buying into Hasbro's Future
Hasbro's outlook for the upcoming year is particularly encouraging. The company forecasts an end to its revenue decline, with a 'slight' increase in total Hasbro revenue in constant currency. While Hasbro hasn't offered firm guidance on earnings, it anticipates its adjusted EBITDA to range between $1.1 billion and $1.15 billion. Assuming the 'ITDA' component resembles 2025 costs, Hasbro's projected net profit might hover around the $800 million mark, resulting in a roughly doubled 2024 profit.
If Hasbro manages to hit this target and achieves an earnings per share of $5.50, its current share price of $70 would translate into a relatively inexpensive 12.7x price-to-earnings ratio. Remarkably, this earnings figure surpasses Wall Street's prediction for 2025 earnings by over $1 per share.
Considering these factors, the surge in Hasbro's share price seems well-justified.
- Investors looking at Hasbro's financial performance might be interested to know that the company's earnings per share surged to $0.46, significantly exceeding the anticipated $0.35, despite a 15% decline in overall sales.
- Amidst Hasbro's mixed results, the company's finance department managed to report positive adjusted profits, albeit showing a loss according to GAAP standards during the same quarter.
- Investors exploring the toymaker's revenue trends may find it intriguing that its popular subsidiary, Wizards of the Coast, experienced a decline in sales by 7%, while Hasbro as a whole saw a modest 4% surge in sales for the full year.
- Due to Hasbro's strong financial outlook and the potential for substantial earnings, some financial analysts believe that investing in Hasbro shares could be a strategic move, offering a relatively inexpensive price-to-earnings ratio if Hasbro reaches its projected earnings per share of $5.50.
