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

Valuation and Earnings

This table compares JAKKS Pacific and LeapFrog Enterprises’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
JAKKS Pacific $706.60 million 0.10 $1.24 million ($3.02) -0.86
LeapFrog Enterprises N/A N/A N/A ($2.57) -0.39

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.

Profitability

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

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

Insider & Institutional 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 will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for JAKKS Pacific and LeapFrog Enterprises, as provided by MarketBeat.

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

JAKKS Pacific currently has a consensus price target of $3.93, suggesting a potential upside of 50.96%. Given JAKKS Pacific’s higher probable upside, analysts clearly believe JAKKS Pacific is more favorable than LeapFrog Enterprises.

Summary

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

JAKKS Pacific Company Profile

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.

LeapFrog Enterprises Company Profile

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.

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