Hasbro (HAS) shares dipped slightly after the company’s latest financial update, which showed notable swings in both revenue and net income. Investors appear to be weighing how these changing numbers might influence Hasbro’s current valuation.
Hasbro’s stock has been on a bit of a rollercoaster this year, with a one-day share price drop of nearly 5% following its recent update, but also a strong year-to-date share price return of 25.7%. In the bigger picture, total shareholder return over the past three years stands at a healthy 22.3%, showing momentum despite some volatility in recent months.
So, with Hasbro now trading at a clear discount to analyst targets and posting strong net income growth, is there a hidden buying opportunity here? Or is the market already factoring in the company’s future prospects?
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Most Popular Narrative: 20% Undervalued
Hasbro’s most-followed valuation narrative places fair value around $89, with shares last closing at $70.95. The difference highlights analyst conviction in recovery and growth despite ongoing volatility.
“Rapidly growing cross-platform digital gaming and licensing revenue, exemplified by Wizards of the Coast (notably Magic: The Gathering's 23%+ YoY growth and MONOPOLY GO!), is expanding Hasbro's addressable market and recurring high-margin earnings streams. This positions the company to capitalize on the global rise of digital entertainment, which should drive outsized revenue and operating profit growth.”
Curious what bold growth assumptions power this eye-catching fair value? The narrative hinges on a digital transformation and a profitability leap, but the true financial levers behind these projections might just surprise you. Want to see which expectations underpin these bullish targets? Only the full story reveals which numbers matter most.
While the fair value model suggests Hasbro is undervalued, a look at its price-to-sales ratio tells a different story. Hasbro trades at 2.3x sales, which is higher than both the US Leisure industry average of 1x and its peer average of 1.2x. The so-called fair ratio, where the market could move towards equilibrium, is estimated at 2x. This raises the question: Is Hasbro’s premium multiple a sign of investor optimism, or does it signal valuation risk if growth stalls?
If you’d rather dig into the numbers yourself and chart a different course, you can create your own perspective in just a few minutes. So why not Do it your way?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
Valuation is complex, but we're here to simplify it.
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