Mattel (MAT): Exploring Valuation After Recent Share Price Gains

Mattel (MAT) shares have shown steady movement in recent sessions, with investors keeping a close eye on the stock's performance in light of recent market activity. The company's year-to-date return has reached 12%, which reflects growing interest in its fundamentals.

See our latest analysis for Mattel.

Mattel’s share price has picked up noticeable momentum lately, surging 4.4% in just the past day and gaining 7.5% over the last month. Its year-to-date price return of nearly 12% adds to a steady long-term track record. Investors who held on for the past five years have enjoyed a total shareholder return of more than 24%, highlighting a pattern where shifts in sentiment often reveal new growth potential.

If today’s move has you thinking about what else could surprise the market, it’s a great time to broaden your outlook and discover fast growing stocks with high insider ownership

The key question now is whether Mattel’s recent gains signal an undervalued opportunity or if the current price already reflects the company’s future growth potential, leaving little upside for new investors.

Price-to-Earnings of 14.3x: Is it justified?

Mattel’s current share price of $19.83 implies a price-to-earnings (P/E) ratio of 14.3x, which stands out as notably low both by industry standards and when compared to its own estimated “fair” P/E of 15.3x.

The price-to-earnings ratio measures how much investors are willing to pay today for a dollar of future earnings. This is a central metric in consumer durables and leisure stocks where consistent profit generation is key. A lower P/E can signal the market is undervaluing Mattel’s quality of earnings or future profitability, or it could reflect skepticism about the company’s growth trajectory.

Compared to the Global Leisure industry, where the average P/E is 21.2x, Mattel appears attractively priced. The current P/E is lower than its peers and also falls below the estimated fair level, suggesting upside potential if profitability improves and sentiment shifts. The fair ratio of 15.3x provides a tangible benchmark for where the market could move if investor confidence strengthens further.

Explore the SWS fair ratio for Mattel

Result: Price-to-Earnings of 14.3x (UNDERVALUED)

However, slowing revenue growth and ongoing market skepticism could weigh on Mattel’s recovery if profitability stalls or if industry trends shift unexpectedly.

Find out about the key risks to this Mattel narrative.

Another View: What Does Our DCF Model Say?

Taking a different approach, the SWS DCF model suggests Mattel's shares are trading at a significant discount to its estimated intrinsic value. With the current price roughly 57% below our fair value estimate, the DCF raises the possibility that the market could be underestimating Mattel’s long-term cash flow potential. However, it is worth considering whether this model is too optimistic about future growth and profitability.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Mattel for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 927 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Mattel Narrative

If you see the story differently, or want to dive into the details yourself, you can build your own perspective and narrative in just a few minutes, Do it your way

A great starting point for your Mattel research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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