The El Segundo, Calif.-based Mattel, Inc. (MAT - Get Rating) is a leading global toymaker and family entertainment company. It offers a variety of products, including popular dolls and accessories like Barbie, Hot Wheels, American Girl, and Polly Pocket. The company operates in three primary segments: North America; International; and American Girl.

The company’s extensive product offerings and wide-spread audience have continuously contributed to its strong market dominance and growth. In 2024, Mattel continued to collaborate with innovative companies to offer engaging products and offerings to its customers. Such initiatives, along with improving its market performance, also position it as a strong contender.

The company commenced 2025 with multiple strategic partnerships. This includes the recent licensing collaboration with Hasbro, Inc. (HAS), under which it introduced a unique assortment of dolls with special fashion-making tools.

Also, the company expanded its product portfolio with a new brand in the building sets category, Mattel Brick Shop™, and the announced Hot Wheels® partnership with Ferrari, the legendary luxury car manufacturer, to develop a full range of Hot Wheels products.

Furthermore, after the successful launch of the first limited edition Hot Wheels Formula 1® car the previous year in a multi-year licensing partnership with Formula 1®, MAT unveiled additional products from the Hot Wheels Formula 1® collection for 2025.

Besides, on the financial front as well, the company’s recent fourth quarter and full-year 2024 results depict a consistent profile. The company’s net sales for the fourth quarter were up 2%, whereas its adjusted gross margin of 50.8% indicates an increase of 200 basis points. Also, its full-year net income of $541.70 million showed a significant improvement of 152.7% from the prior year.

MAT’s performance on Wall Street has also been impressive. Shares of MAT gained 21.4% over the past month and 14.7% over the past six months to close the last trading session at $21.80.

Let’s look at factors that could influence MAT’s performance in the upcoming months.

Positive Recent Developments

On February 20, 2025, MAT and Hasbro, Inc. launched the new PLAY-DOH Barbie collection from Hasbro’s new licensing collaboration with Mattel. The unique collection consists of an assortment of dolls with special fashion-making tools to encourage children to bring out their inner fashionista and create whatever DOH-ified fashions they can imagine.

Also, on January 28, 2025, MAT expanded its portfolio into building sets with a new brand, Mattel Brick Shop, set to launch its first product line globally this spring. The new brand Mattel Brick Shop provides a quality brick fit, easy-to-follow playbooks, sturdy builds, and endless creativity to expand the builder’s imagination.

It strives to deliver value with every product, including more surprise features, post-build opportunities like customization, and more piece count.

Impressive Financials

For the fourth quarter that ended December 31, 2024, MAT reported net sales of $1.65 billion, up 1.6% year-over-year. Its adjusted gross profit for the quarter was $836.70 million, reflecting growth of 5.9% from the prior year’s quarter. Also, the company’s adjusted operating income improved 9.7% from the year-ago value.

In addition, adjusted EBITDA increased 6.4% year-over-year to $248.90 million. The company’s net income came in at $140.90 million for the quarter, whereas its adjusted net income per common share rose 20.7% over the previous-year period.

Furthermore, as of December 31, 2024, MAT’s cash and equivalents stood at $1.39 billion, compared to $1.26 billion as of December 31, 2023.

Favorable Analyst Estimates

Analysts expect MAT’s revenue for the second quarter (ending June 2025) to come in at $1.11 billion, indicating an increase of 2.9% year-over-year, and the consensus EPS estimate of $0.21 for the same period reflects an improvement of 8.1% year-over-year. Moreover, the company has surpassed the consensus EPS estimates in all of the trailing four quarters.

For the fiscal year (ending December 2025), the company’s revenue and EPS are anticipated to grow 1.7% and 3.5% year-over-year to $5.47 billion and $1.68. In addition, Street expects its revenue for the fiscal year 2026 to grow 2.4% from the prior year to $5.60 billion, while EPS for the same year is projected to increase 8.2% year-over-year to $1.81, respectively.

High Profitability

MAT’s trailing-12-month net income margin of 10.07% is 134.9% higher than the 4.29% industry average. Its trailing-12-month EBIT margin of 13.72% is considerably higher than the industry average of 8.14%. Likewise, the stock’s trailing-12-month levered FCF margin of 11.23% is 152.8% higher than the 4.44% industry average.

Furthermore, the stock’s trailing-12-month ROCE, ROTC, and ROTA of 24.55%, 9.52%, and 8.28% are higher than the 11.21%, 6.22%, and 3.88% industry average, respectively.

POWR Ratings Reflect Promise

MAT’s robust fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. MAT has an A grade for Quality, consistent with its higher-than-industry profitability.

MAT is ranked #6 among the 19 stocks in the A-rated Entertainment – Toys & Video Games industry.

Beyond what I have stated above, we have also given MAT grades for Growth, Stability, Sentiment, Momentum, and Value. Get access to all the MAT ratings here.

Bottom Line

MAT is among the leading toy and entertainment companies around the world. The company’s dominant market position and wide product portfolio enable it to cater to audiences of all ages and regions. Also, its recent product launches and strategic licensing agreements are accelerating its operations and strengthening its forthcoming opportunities.

Given the company’s strong financials, accelerating profitability, and robust growth outlook, it could be wise to invest in this stock.

How Does Mattel, Inc. (MAT) Stack Up Against Its Peers?

While MAT has an overall POWR Rating of B, investors could also check out these other stocks within the A-rated Entertainment – Toys & Video Games industry with A (Strong Buy) or B (Buy) ratings: DoubleDown Interactive Co., Ltd. (DDI - Get Rating), Playtika Holding Corp. (PLTK - Get Rating), and PLAYSTUDIOS, Inc., (MYPS - Get Rating).

For exploring more A and B-rated entertainment stocks, click here.

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MAT shares were trading at $21.35 per share on Friday afternoon, down $0.45 (-2.06%). Year-to-date, MAT has gained 20.42%, versus a 2.78% rise in the benchmark S&P 500 index during the same period.

About the Author: Rjkumari Saxena

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions. More...

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