What Happened?
Shares of toy manufacturing and entertainment company (NASDAQ: MAT) jumped 3% in the afternoon session after investors reacted positively to news of a product tie-up with streaming giant Netflix.
The toy company announced it would develop a line of products, including dolls and action figures, based on a Netflix movie. This partnership was viewed as a significant opportunity for Mattel, given its smaller size compared to Netflix. The enthusiasm for the deal built on recent positive momentum, which included upbeat fourth-quarter forecasts and management's reassurance about accelerating orders from U.S. retailers.
After the initial pop the shares cooled down to $19.02, up 3.2% from previous close.
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What Is The Market Telling Us
Mattel’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 5.1% on the news that the company's management provided an optimistic outlook for its fourth quarter, which overshadowed weaker-than-expected third-quarter results. The toy maker had reported third-quarter earnings and revenue that fell short of consensus estimates. This performance was attributed to industry-wide shifts in retailer ordering patterns which challenged its U.S. business. However, during the company's earnings call, management noted that orders from retailers in the U.S. had accelerated significantly since the beginning of the fourth quarter. Despite the quarterly miss, the company reiterated its full-year 2025 guidance, projecting net sales growth of 1% to 3%. This forward-looking confidence appeared to reassure investors, leading them to look past the recent difficulties and focus on the expected strong finish to the year.
Mattel is up 7.3% since the beginning of the year, but at $19.02 per share, it is still trading 13.3% below its 52-week high of $21.94 from February 2025. Investors who bought $1,000 worth of Mattel’s shares 5 years ago would now be looking at an investment worth $1,333.
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