Mattel (MAT, Financial) has formed a strategic alliance with OpenAI to enhance its product offerings using artificial intelligence. This partnership aims to merge the strengths of both companies, leveraging Mattel’s renowned brand portfolio alongside OpenAI's AI expertise, to craft innovative experiences for global audiences.
The collaboration will focus on the design, development, and rollout of pioneering products and experiences that integrate advanced AI features. As part of this ongoing effort, both companies are dedicated to pushing the boundaries of what's possible in the realm of tech-enhanced consumer products. They plan to unveil their inaugural product later this year, marking the beginning of this transformative journey.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Mattel Inc (MAT, Financial) is $23.36 with a high estimate of $30.00 and a low estimate of $17.00. The average target implies an upside of 19.49% from the current price of $19.55. More detailed estimate data can be found on the Mattel Inc (MAT) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Mattel Inc's (MAT, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Mattel Inc (MAT, Financial) in one year is $21.01, suggesting a upside of 7.47% from the current price of $19.55. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Mattel Inc (MAT) Summary page.
MAT Key Business Developments
Release Date: May 05, 2025
- Net Sales: Increased 2% as reported and 4% in constant currency to $827 million.
- Adjusted Gross Margin: Increased 130 basis points to 49.6%.
- Adjusted EBITDA: Grew 7% to $57 million.
- Cash at Quarter End: $1.24 billion.
- Share Repurchases: $160 million repurchased in the quarter.
- Adjusted Operating Loss: Improved by $7 million to a negative $16 million.
- Adjusted Loss Per Share: Improved by $0.02 to negative $0.03.
- Free Cash Flow: $582 million on a trailing 12-month basis.
- Gross Billings: Increased 5% in constant currency.
- Retail Inventory: Up high single digits globally.
- Debt: Total debt approximately $2.34 billion.
- Leverage Ratio: Improved to 2.2 times debt to adjusted EBITDA.
- Cost Savings Target: Increased to $80 million for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mattel Inc (MAT, Financial) reported a 2% increase in net sales as reported and 4% in constant currency for the first quarter of 2025.
- Adjusted gross margin improved by 130 basis points to 49.6%, indicating enhanced profitability.
- The company achieved a 7% growth in adjusted EBITDA, reaching $57 million.
- Mattel Inc (MAT) has successfully diversified its supply chain, reducing reliance on China to less than 40% of global production, compared to the industry average of 80%.
- The company has a strong balance sheet with $1.24 billion in cash at the end of the quarter, after repurchasing $160 million of shares.
Negative Points
- Global trade uncertainties and tariffs pose significant risks to the toy industry, potentially impacting future performance.
- Mattel Inc (MAT) has paused its full-year 2025 guidance due to the volatile macroeconomic environment and evolving US tariff situation.
- The company faces cost inflation pressures, particularly from higher labor and logistics costs, which negatively impacted gross margin by 100 basis points.
- Infant, Toddler, and Preschool categories saw a decline of 5%, primarily due to planned exits in baby gear and power wheels.
- Retail inventory levels are up high single digits globally, reflecting the impact of a later Easter holiday and a buildup of movie-related products, which could affect future sales dynamics.
