Mattel Shares Surge 19% This Year After Marvel and Disney Partnerships: Are They Fairly Priced?

• Wondering if Mattel is a smart buy right now? If you are curious whether the current stock price means good value, you are in the right place for a deep dive.
• Mattel’s shares have moved up 6.5% in the past week, gaining 11.0% over the last month and surging 19.1% year-to-date. This signals renewed investor interest and potential growth momentum.
• Recent headlines spotlight Mattel’s strategic partnerships and new toy releases, including collaborations with Marvel and Disney, which have caught the market’s attention. The company’s ongoing expansion into digital gaming has also generated buzz and could help explain the latest moves in the share price.
• On our valuation scorecard, Mattel lands a 4 out of 6, with each point representing an undervalued dimension according to our checks. In the next section, we will break down what this means and explore the valuation methods behind it. Plus, you will find a fresh perspective on value you will not want to miss by the end of the article.

Mattel delivered 11.0% returns over the last year. See how this stacks up to the rest of the Leisure industry.

Approach 1: Mattel Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future cash flows and discounting them back to the present to reflect today’s dollars. This approach aims to capture both the current earning power and the anticipated growth of a business over time.

For Mattel, analysts estimate that the company generated $477.9 million in Free Cash Flow (FCF) over the last twelve months. Looking ahead, cash flows are forecasted to grow through 2027, with FCF projected to reach $604.4 million. Beyond five years, further growth projections are extrapolated, leading to an estimated FCF of $906.5 million by 2035, all values in US dollars.

Using these projections, the DCF model calculates Mattel’s intrinsic fair value at $46.21 per share. With the current share price trading at a 54.3% discount to this intrinsic value, the DCF suggests that Mattel stock is significantly undervalued at today’s levels.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Mattel is undervalued by 54.3%. Track this in your watchlist or portfolio, or discover 920 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Mattel.

Approach 2: Mattel Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is the go-to valuation method for profitable companies like Mattel. Because it measures how much investors are willing to pay for each dollar of earnings, the PE ratio gives a quick snapshot of market expectations about a company's future profits and risk profile.

Generally, a "normal" or "fair" PE ratio depends on growth prospects and risk. Fast-growing, low-risk companies tend to trade at higher PE ratios, while slower-growing or riskier ones usually command lower valuations. Investors look for PE ratios that reflect the balance of future opportunity and potential pitfalls.

Mattel is currently trading at a PE of 15.19x. For context, this is below the Leisure industry average of 21.99x and also well under the peer group average of 48.15x. However, relying solely on these benchmarks does not capture Mattel’s specific strengths, risks, or growth trajectory.

This is where Simply Wall St’s proprietary “Fair Ratio” comes in. It is a dynamic metric that estimates a fair PE based on Mattel’s own earnings growth, margins, size, and the industry context. For Mattel, the Fair Ratio is 15.41x, reflecting what would be considered an appropriate multiple after considering all these factors. Unlike blunt peer or industry averages, the Fair Ratio provides a truly tailored benchmark for value.

Comparing Mattel’s actual PE of 15.19x to its Fair Ratio of 15.41x, the difference is less than 0.10x, signaling that the stock is priced about right by this methodology.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Mattel Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is simply your own story about a company—your unique view on how its future might unfold, which you can translate into financial forecasts and a fair value estimate. Narratives connect the dots: they start with your outlook for Mattel, turn those ideas into real numbers like future revenue, profit margins, or earnings, and then show you what a fair share price could be.

Narratives are easy to create and explore right within the Community page on Simply Wall St. Millions of investors worldwide are already using them to guide smarter decisions. By comparing your Narrative’s fair value to today’s stock price, you get a clear, personalized answer on how the stock might be valued. Plus, Narratives keep pace with the market and update automatically when new news or financial results are released, so your story is always relevant. For example, one Mattel investor might project rapid digital growth and set a high fair value, while another expects slower recovery and uses a much lower estimate. Both perspectives appear side by side, empowering you to choose yours with confidence.

Do you think there's more to the story for Mattel? Head over to our Community to see what others are saying!

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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