LeapFrog Enterprises (NYSE: LF) and JAKKS Pacific (NASDAQ:JAKK) are both cyclical consumer goods & services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for LeapFrog Enterprises and JAKKS Pacific, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LeapFrog Enterprises 0 0 0 0 N/A
JAKKS Pacific 0 6 0 0 2.00

JAKKS Pacific has a consensus target price of $3.93, indicating a potential upside of 67.02%. Given JAKKS Pacific’s higher probable upside, analysts clearly believe JAKKS Pacific is more favorable than LeapFrog Enterprises.

Profitability

This table compares LeapFrog Enterprises and JAKKS Pacific’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LeapFrog Enterprises -53.22% -138.56% -86.18%
JAKKS Pacific -9.36% -15.58% -4.89%

Earnings & Valuation

This table compares LeapFrog Enterprises and JAKKS Pacific’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LeapFrog Enterprises N/A N/A N/A ($2.57) -0.39
JAKKS Pacific $706.60 million 0.09 $1.24 million ($3.02) -0.78

JAKKS Pacific has higher revenue and earnings than LeapFrog Enterprises. JAKKS Pacific is trading at a lower price-to-earnings ratio than LeapFrog Enterprises, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

56.8% of JAKKS Pacific shares are owned by institutional investors. 5.4% of JAKKS Pacific shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

JAKKS Pacific beats LeapFrog Enterprises on 7 of the 8 factors compared between the two stocks.

About LeapFrog Enterprises

LeapFrog Enterprises, Inc. is a developer of educational entertainment for children. The Company’s product portfolio includes multimedia learning platforms and related content and learning toys. It operates through two segments: United States (U.S.) and International. The U.S. segment is engaged in the development, design, sale and marketing of multimedia learning platforms, related content and learning toys that are sold primarily through retailers, distributors, and directly to consumers via the LeapFrog App Center. The International segment is engaged in the localization, sale and marketing of multimedia learning platforms, related content, and learning toys, originally developed for the United States. This segment markets and sells its products to national and regional mass-market and specialty retailers and other outlets through its offices outside of the United States, through distributors in various international markets, and directly to consumers via the LeapFrog App Center.

About JAKKS Pacific

JAKKS Pacific, Inc. is a multi-line, multi-brand toy company. The Company designs, produces, markets and distributes toys and related products, pet toys, consumables and related products, electronics and related products, kids indoor and outdoor furniture, and other consumer products. The Company operates through two business segments: traditional toys and electronics, and role play, novelty and seasonal toys. The traditional toys and electronics segment includes action figures, vehicles, playsets, plush products, dolls, accessories, electronic products, construction toys, infant and pre-school toys, foot to floor ride-on vehicles, wagons and pet products and related products. The role play, novelty and seasonal segment includes role play and dress-up products, novelty toys, seasonal and outdoor products, indoor and outdoor kids’ furniture and Halloween and everyday costume play.

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