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Hasbro (HAS) Rallies 31% YTD: What's Driving the Stock?
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Shares of Hasbro, Inc. (HAS - Free Report) have rallied 30.9% in the year-to-date period compared with the Zacks Toys - Games - Hobbies industry’s 6.9% growth. The company's momentum was fueled by its investment in product innovation, focus on strategic partnerships and profitable sales-boosting initiatives.
Recently, HAS reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate by 58.4% and 5.6%. Despite a year-over-year revenue decline, earnings increased on the back of a favorable business mix and improved operations. It achieved significant operating margin expansion, driven by growth in consumer product licensing, increased MAGIC performance and improved efficiency in the supply chain.
The Zacks Consensus Estimate for HAS’ 2024 earnings per share (EPS) indicates growth of 56.7% from the prior year’s levels. Earnings estimates for 2024 and 2025 have moved up 4.8% and 2.3% in the past 30 days, respectively. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and outperformance in the near term.
Image Source: Zacks Investment Research
Let’s discuss the growth drivers of this Zacks Rank #3 (Hold) company.
Factors Driving Growth
HAS continues to invest in innovation, focus on strategic partnerships or collaborations and implement other profitable sales-boosting initiatives. During second-quarter 2024, Hasbro recorded strong licensing performance. Monopoly Go! by Scopely boosted revenues and operating profit. During the quarter, the company announced a new Power Rangers arcade-style game with Digital Eclipse. In July 2024, the company launched the Transformers Overwatch 2 Crossover. It has a strong pipeline of licensing opportunities across PC, console, mobile and casino platforms.
Consumer Products Licensing witnessed growth during the second quarter, supported by the new partnership with Kayo collectible trading cards and the resurgence of My Little Pony in China. Littlest Pet Shop's international appeal also continues to rise. HAS also unveiled several partner-led branded properties, including a new Peppa Pig theme park in Germany and the Game Room and Planet Play School in New Jersey, offering 60,000 square feet of games and STEM-based play experiences.
Hasbro’s entertainment business also bodes well in contributing to its growth trends. Hasbro, in partnership with Paramount, is set to launch the star-studded animated film Transformers 1 to theaters in September 2024. The company is seeing success in digital with mega hits like Monopoly Go!, showing strong staying power. During the second-quarter 2024 earnings call, the company reported having more than 35 entertainment projects in development. HAS continues to drive its IP within consumer products through global partners in multiple categories.
Apart from its entertainment business, Hasbro’s gaming business is driving its top-line growth. The company has been witnessing strengths in demand for its gaming services on the back of its supreme gaming portfolio and refining gaming experiences across a multitude of platforms like face-to-face gaming, tabletop gaming and digital gaming experiences in mobile.
In 2024, HAS is planning to introduce innovations into the category. It will feature a new performance start technology, pop off-the-shelf design and attractive pricing across the range. Board Games continue to be a leading category for HAS, expected to grow in the year ahead. The company is optimistic that 2024 will be a big year for gaming, including adult party games, family card games, casual strategy and extending mega hits like Monopoly. It also plans to introduce its 3D role-playing sandbox experience on Unreal Engine V, bringing popular franchises to life across PC, console and mobile platforms.
RCL has a trailing four-quarter earnings surprise of 18.5%, on average. The stock has rallied 59.4% in the past year. The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) calls for growth of 18.1% and 69.9%, respectively, from the year-ago levels.
DoubleDown Interactive Co., Ltd. (DDI - Free Report) currently flaunts a Zacks Rank of 1. DDI has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has surged 70.7% in the past year.
The Zacks Consensus Estimate for DDI’s 2024 sales and EPS increased 12.6% and 15.8%, respectively, from the year-ago levels.
Monarch Casino & Resort, Inc. (MCRI - Free Report) currently carries a Zacks Rank #2 (Buy). MCRI has a trailing four-quarter negative earnings surprise of 3.5%, on average. The stock has increased 9.4% in the past year.
The Zacks Consensus Estimate for MCRI’s 2024 sales and EPS indicates an increase of 2.3% and 10%, respectively, from the year-ago levels.
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Hasbro (HAS) Rallies 31% YTD: What's Driving the Stock?
Shares of Hasbro, Inc. (HAS - Free Report) have rallied 30.9% in the year-to-date period compared with the Zacks Toys - Games - Hobbies industry’s 6.9% growth. The company's momentum was fueled by its investment in product innovation, focus on strategic partnerships and profitable sales-boosting initiatives.
Recently, HAS reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate by 58.4% and 5.6%. Despite a year-over-year revenue decline, earnings increased on the back of a favorable business mix and improved operations. It achieved significant operating margin expansion, driven by growth in consumer product licensing, increased MAGIC performance and improved efficiency in the supply chain.
The Zacks Consensus Estimate for HAS’ 2024 earnings per share (EPS) indicates growth of 56.7% from the prior year’s levels. Earnings estimates for 2024 and 2025 have moved up 4.8% and 2.3% in the past 30 days, respectively. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and outperformance in the near term.
Image Source: Zacks Investment Research
Let’s discuss the growth drivers of this Zacks Rank #3 (Hold) company.
Factors Driving Growth
HAS continues to invest in innovation, focus on strategic partnerships or collaborations and implement other profitable sales-boosting initiatives. During second-quarter 2024, Hasbro recorded strong licensing performance. Monopoly Go! by Scopely boosted revenues and operating profit. During the quarter, the company announced a new Power Rangers arcade-style game with Digital Eclipse. In July 2024, the company launched the Transformers Overwatch 2 Crossover. It has a strong pipeline of licensing opportunities across PC, console, mobile and casino platforms.
Consumer Products Licensing witnessed growth during the second quarter, supported by the new partnership with Kayo collectible trading cards and the resurgence of My Little Pony in China. Littlest Pet Shop's international appeal also continues to rise. HAS also unveiled several partner-led branded properties, including a new Peppa Pig theme park in Germany and the Game Room and Planet Play School in New Jersey, offering 60,000 square feet of games and STEM-based play experiences.
Hasbro’s entertainment business also bodes well in contributing to its growth trends. Hasbro, in partnership with Paramount, is set to launch the star-studded animated film Transformers 1 to theaters in September 2024. The company is seeing success in digital with mega hits like Monopoly Go!, showing strong staying power. During the second-quarter 2024 earnings call, the company reported having more than 35 entertainment projects in development. HAS continues to drive its IP within consumer products through global partners in multiple categories.
Apart from its entertainment business, Hasbro’s gaming business is driving its top-line growth. The company has been witnessing strengths in demand for its gaming services on the back of its supreme gaming portfolio and refining gaming experiences across a multitude of platforms like face-to-face gaming, tabletop gaming and digital gaming experiences in mobile.
In 2024, HAS is planning to introduce innovations into the category. It will feature a new performance start technology, pop off-the-shelf design and attractive pricing across the range. Board Games continue to be a leading category for HAS, expected to grow in the year ahead. The company is optimistic that 2024 will be a big year for gaming, including adult party games, family card games, casual strategy and extending mega hits like Monopoly. It also plans to introduce its 3D role-playing sandbox experience on Unreal Engine V, bringing popular franchises to life across PC, console and mobile platforms.
Key Picks
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL has a trailing four-quarter earnings surprise of 18.5%, on average. The stock has rallied 59.4% in the past year. The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) calls for growth of 18.1% and 69.9%, respectively, from the year-ago levels.
DoubleDown Interactive Co., Ltd. (DDI - Free Report) currently flaunts a Zacks Rank of 1. DDI has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has surged 70.7% in the past year.
The Zacks Consensus Estimate for DDI’s 2024 sales and EPS increased 12.6% and 15.8%, respectively, from the year-ago levels.
Monarch Casino & Resort, Inc. (MCRI - Free Report) currently carries a Zacks Rank #2 (Buy). MCRI has a trailing four-quarter negative earnings surprise of 3.5%, on average. The stock has increased 9.4% in the past year.
The Zacks Consensus Estimate for MCRI’s 2024 sales and EPS indicates an increase of 2.3% and 10%, respectively, from the year-ago levels.