Mattel (Mattel Inventory Quote, Chart, Information, Analysts, Financials NASDAQ:MAT) shares fell greater than 30% in after-hours buying and selling following weaker-than-expected fourth-quarter outcomes and gentle 2026 steering, and Roth analyst Eric Handler has lowered his value goal.
In a Feb. 11 report, Handler maintained his “Impartial” score however minimize his 12-month goal to $16.00 from $22.00, based mostly on 2026 multiples of 13-times EPS and seven.5-times Adjusted EBITDA.
“Hopes for a robust 12 months are dashed as natural, fixed foreign money internet gross sales for 2026 now seem on observe for sub-2% development,” Handler stated, including that $150-million in strategic investments will possible stress adjusted working earnings and EPS this 12 months, with a possible payoff in 2027.
For the fourth quarter, Mattel reported internet gross sales of $1.767-billion, down 6% year-over-year, and EPS of $0.39, each effectively under Handler’s and consensus estimates. Automobiles, led by Scorching Wheels, rose 20%, whereas Challenger Manufacturers elevated 16% and Dolls grew 2%. Toddler, Toddler & Preschool declined 8% attributable to strategic exits.
Gross margin fell to 46.0% from 50.8% a 12 months earlier, reflecting greater reductions, tariffs and inflation, partially offset by value financial savings. Adjusted working margin declined to 9.1% from 9.8%.
Handler forecasts 2026 internet gross sales of $5.641-billion, up 5.5%, with greater than half of the expansion pushed by M&A and international change tailwinds.
He lowered his 2026 EPS estimate to $1.25 from $1.70, reflecting sub-2% natural development and the influence of deliberate investments.
Mattel additionally introduced it is going to purchase the remaining 50% of its mobile-game studio, Mattel163, from three way partnership associate NetEase, valuing the enterprise at $318-million. Handler expects the deal to shut by the top of Q1 and to be instantly accretive.
Administration is guiding to mid- to high-single-digit income development and double-digit adjusted working earnings development in 2027, supported by returns on 2026 investments and new licensing tied to imminent film releases.
Handler now expects Mattel to generate $876.0-million in Adjusted EBITDA on income of $5.641-billion in fiscal 2026, enhancing to $946.9-million in Adjusted EBITDA on income of $6.041-billion in fiscal 2027.
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