It's been a sad week for JAKKS Pacific, Inc. (NASDAQ:JAKK), who've watched their investment drop 10% to US$17.67 in the week since the company reported its quarterly result. It was a pretty negative result overall, with revenues of US$119m missing analyst predictions by 4.0%. Worse, the business reported a statutory loss of US$0.21 per share, a substantial decline on analyst expectations of a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the current consensus, from the dual analysts covering JAKKS Pacific, is for revenues of US$624.6m in 2025. This implies a chunky 8.8% reduction in JAKKS Pacific's revenue over the past 12 months. Statutory earnings per share are expected to plummet 56% to US$1.53 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$645.2m and earnings per share (EPS) of US$2.15 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.2% to US$33.50.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 17% by the end of 2025. This indicates a significant reduction from annual growth of 5.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.0% annually for the foreseeable future. It's pretty clear that JAKKS Pacific's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for JAKKS Pacific. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Even so, be aware that JAKKS Pacific is showing 1 warning sign in our investment analysis , you should know about...

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.