JAKKS Pacific (JAKK) versus Bally Technologies (BYI) Critical Review

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

Profitability



This table compares JAKKS Pacific and Bally Technologies’ 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%
Bally Technologies N/A N/A N/A

Institutional and Insider Ownership

56.0% of JAKKS Pacific shares are owned by institutional investors. 5.2% of JAKKS Pacific shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for JAKKS Pacific and Bally Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
JAKKS Pacific 0 6 0 0 2.00
Bally Technologies 0 0 0 0 N/A

JAKKS Pacific presently has a consensus price target of $3.93, suggesting a potential upside of 48.11%. Given JAKKS Pacific’s higher probable upside, analysts plainly believe JAKKS Pacific is more favorable than Bally Technologies.

Earnings & Valuation

This table compares JAKKS Pacific and Bally Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
JAKKS Pacific $706.60 million 0.10 $1.24 million ($3.02) -0.88
Bally Technologies N/A N/A N/A $2.31 36.05

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

Volatility & Risk

JAKKS Pacific has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Bally Technologies has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500.

Summary

Bally Technologies beats JAKKS Pacific on 5 of the 9 factors compared between the two stocks.

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.

About Bally Technologies

Bally Technologies, Inc. (Bally) is a global gaming company, which designs, manufactures, operates, and distributes advanced technology-based gaming devices, systems, server-based solutions, custom mobile applications, and interactive applications. The Company also provides hardware, including spinning-reel and video gaming devices, specialty gaming devices, and wide-area progressive systems. The Company supports customers include land-based, riverboat, and Native American casinos, video lottery and central determination markets. The Company derives its revenue from sale of gaming devices and related equipment, parts and conversion kits; operation of linked progressive systems, video lottery and centrally determined systems, and the rental of gaming devices and content, and sale and support of specialized systems-based software, hardware and interactive products and related recurring maintenance revenue. In July 2014, Bally Technologies Inc acquired Dragonplay Ltd. (Dragonplay).

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