TLDR
- Mattel (MAT) stock plunged 30% in premarket trading after reporting Q4 EPS of $0.39 versus $0.53 expected and revenue of $1.77B versus $1.85B consensus
- Company issued FY 2026 EPS guidance of $1.18-$1.30, far below analyst consensus of $1.75, triggering widespread estimate cuts
- JPMorgan downgraded the stock from Neutral to Underweight with a $14 price target, while Citi cut its rating to Neutral with a $16 target
- December U.S. gross billings grew slower than expected, raising concerns about demand durability and margin pressure going forward
- Mattel agreed to acquire full ownership of Mattel163 mobile games studio to accelerate its digital gaming strategy
Mattel stock opened at $15.08 Wednesday after closing at $21.06 Tuesday, marking a roughly 30% premarket drop following disappointing fourth quarter results.
The toy maker reported Q4 earnings per share of $0.39, missing analyst expectations of $0.53 by $0.14. Revenue came in at $1.77 billion compared to the $1.85 billion consensus estimate.
The miss alone would have been bad enough. But the guidance made things worse.
Mattel issued fiscal year 2026 EPS guidance of $1.18 to $1.30. Wall Street had been expecting around $1.75. That’s a massive gap that sent analysts scrambling to revise their models downward.
The company reported a net margin of 8.27% and return on equity of 20.60% for the quarter. Revenue grew 7.3% year-over-year, but that wasn’t enough to offset concerns about slowing momentum.
Management pointed to December U.S. gross billings as a particular weak spot. The holiday period grew less than expected, raising red flags about consumer demand heading into 2026.
Wall Street Turns Bearish
JPMorgan downgraded Mattel from Neutral to Underweight with a $14 price target. The bank sees more downside ahead from current levels.
Citi followed suit, cutting its rating to Neutral from Buy. The firm slashed its price target from $25 to $16, calling the Q4 report “thesis-changing.”
Citi now views 2026 as an investment year and cut its out-year estimates across the board. Zacks Research also downgraded the stock from Hold to Strong Sell.
Other analyst moves included Roth Mkm setting a $16 price objective and UBS maintaining a Buy rating with a $30 target. Jefferies kept its Buy rating as well.
The stock now carries a consensus rating of Hold with an average price target of $20.57 across 11 analysts. Three rate it a Buy, six have it at Hold, and two say Sell.
Digital Strategy Moves Forward
Despite the earnings disappointment, Mattel announced it will acquire full ownership of its Mattel163 mobile games studio. The move accelerates the company’s digital and gaming strategy.
The acquisition addresses one of the weaknesses analysts have flagged in recent quarters. Mattel has been working to expand beyond traditional toy sales into digital entertainment.
The company continues to push forward with IP initiatives. Barbie anniversary programming remains in development. A Paramount TMNT consumer products collaboration is also in the works.
Options traders showed heavy call buying activity Wednesday, with 6,361 calls traded. That’s roughly 460% above typical intraday volume, suggesting some investors see an opportunity in the selloff.
Volume on the stock reached 12.7 million shares as it traded around $15.65 by midday. The company has a market cap of $4.97 billion with a P/E ratio of 11.94.
Institutional investors own 97.15% of Mattel’s stock. EdgePoint Investment Group holds the largest position with 44.7 million shares valued at $751.7 million.
The stock’s 50-day moving average sits at $20.76, while the 200-day moving average is $19.15. Mattel has a debt-to-equity ratio of 0.77 and a current ratio of 1.60.
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