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Spin Master (TSE:TOY)
TSX:TOY
Top Page
Spin Master
(TSX:TOY)
61Neutral
Positive Factors
Market Expansion
The How to Train Your Dragon line is expected to cater to both boys and girls, potentially broadening the market reach and customer base for Spin Master.
Partnerships
Spin Master has extended its Gabby's Dollhouse license with Dreamworks, signaling a continued partnership that could enhance product offerings and brand visibility.
Valuation
TOY trades at a significant discount to its 5-year average EV/EBITDA and its toy peers, presenting an attractive entry point.
Negative Factors
Currency Fluctuations
FX could be a favorable variable as the USD appreciates relative to CAD, making Spin Master a good fit for investors looking for indirect exposure to the USD.
Spin Master (TOY) vs. S&P 500 (SPY)
Market Cap
C$2.31B
Dividend Yield2.12%
Average Volume (3M)141.24K
Price to Earnings (P/E)20.8
Beta (1Y)0.76
Revenue Growth20.89%
EPS Growth-43.13%
CountryCA
Employees3,000
SectorConsumer Cyclical
Sector Strength60
IndustryLeisure
Share Statistics
EPS (TTM)1.11
Shares Outstanding33,679,092
10 Day Avg. Volume135,006
30 Day Avg. Volume141,242
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.80
Price to Cash Flow (P/CF)2.20
P/FCF Ratio2.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$37.17Price Target Upside71.29% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Spin Master Business Overview & Revenue Model
Company DescriptionSpin Master Corp. is a leading global children's entertainment company renowned for creating, designing, manufacturing, and marketing a diverse portfolio of innovative toys, games, and entertainment properties. Established in 1994 and headquartered in Toronto, Canada, Spin Master operates through three key segments: Toys, Entertainment, and Digital Games. The company is known for its popular brands such as PAW Patrol, Bakugan, Hatchimals, and Air Hogs, and continues to expand its reach through compelling storytelling and engaging experiences.
How the Company Makes MoneySpin Master generates revenue primarily through the sale of toys and games, which is the largest segment of its business. The company designs and manufactures a wide array of products marketed under various brand names, which are distributed globally through partnerships with major retailers and distributors. Additionally, Spin Master earns income from its Entertainment segment, which includes the development and distribution of television programs and films, leveraging its intellectual properties like PAW Patrol into successful media franchises. The Digital Games segment also contributes to revenue through mobile and digital games, which often feature in-app purchases and collaborations with other entertainment companies. Strategic acquisitions and partnerships further enhance Spin Master's market position and contribute to its diverse revenue streams.
Spin Master Financial Statement Overview
Summary
Spin Master demonstrates strong revenue growth and efficient operational management, as seen in its income statement. The balance sheet reflects a stable equity base and manageable leverage, although rising liabilities could be a concern. Cash flow statements highlight robust cash generation, but increased capital expenditure must yield positive returns to sustain growth.Income Statement
Spin Master shows a consistent revenue growth from $1.57B in 2020 to $2.26B in 2024, indicating a positive growth trajectory. The gross profit margins have remained strong, with a gross profit of $1.19B in 2024, reflecting efficient cost management. However, the net profit margin has declined, with net income dropping from $261M in 2022 to $81.9M in 2024, which is a concern for profitability.75
Positive
Balance Sheet
The company maintains a healthy equity position with stockholders' equity increasing to $1.40B in 2024. Despite an increase in total debt to $534M, the debt-to-equity ratio remains manageable. The equity ratio of 53.2% indicates solid asset financing through equity. However, the rise in total liabilities may pose a risk if not controlled.70
Positive
Cash Flow
Operating cash flow increased to $328M in 2024, signifying strong cash generation capabilities. Free cash flow also improved to $210M, aiding financial flexibility. However, the high capital expenditure and investing cash outflow suggest significant reinvestment or expansion, which requires careful management to ensure returns.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.26B | 1.90B | 2.02B | 2.04B | 1.57B | Gross Profit |
| 1.19B | 1.04B | 1.10B | 1.06B | 727.90M | EBIT |
| 165.50M | 188.90M | 343.30M | 276.00M | 47.50M | EBITDA |
| 295.70M | 336.40M | 373.30M | 379.90M | 150.50M | Net Income Common Stockholders |
| 81.90M | 151.40M | 261.30M | 198.60M | 45.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 225.80M | 705.70M | 644.30M | 562.70M | 320.60M | Total Assets |
| 2.63B | 1.99B | 1.79B | 1.74B | 1.34B | Total Debt |
| 534.40M | 62.10M | 71.20M | 73.00M | 74.40M | Net Debt |
| 308.60M | -643.60M | -573.10M | -489.70M | -246.20M | Total Liabilities |
| 1.23B | 570.60M | 550.00M | 684.30M | 499.20M | Stockholders Equity |
| 1.40B | 1.42B | 1.24B | 1.05B | 842.90M |
| Cash Flow | Free Cash Flow | |||
| 210.40M | 119.60M | 149.90M | 339.60M | 229.70M | Operating Cash Flow |
| 328.00M | 227.00M | 249.30M | 419.10M | 310.80M | Investing Cash Flow |
| -1.07B | -135.30M | -109.20M | -153.20M | -84.90M | Financing Cash Flow |
| 270.20M | -44.10M | -20.30M | -18.30M | -16.30M |
Spin Master Technical Analysis
Negative
21.70
Price Trends
27.39
Negative
29.93
Negative
30.25
Negative
Market Momentum
-0.98
Negative
33.76
Neutral
20.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TOY, the sentiment is Negative. The current price of 21.7 is below the 20-day moving average (MA) of 24.66, below the 50-day MA of 27.39, and below the 200-day MA of 30.25, indicating a bearish trend. The MACD of -0.98 indicates Negative momentum. The RSI at 33.76 is Neutral, neither overbought nor oversold. The STOCH value of 20.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TOY.
Spin Master Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | C$65.16B | 18.30 | 18.66% | 1.08% | 11.62% | -8.08% | |
73 Outperform | $130.27B | 25.53 | 8.63% | 6.32% | 24.95% | -17.19% | |
71 Outperform | $84.69B | 19.26 | 21.72% | 2.60% | 1.30% | -18.15% | |
69 Neutral | $2.77B | 11.03 | 4.98% | 2.23% | 8.72% | -48.78% | |
61 Neutral | C$2.31B | 20.82 | 5.82% | 2.12% | 20.89% | -43.13% | |
59 Neutral | $10.97B | 9.83 | -1.56% | 4.06% | 1.31% | -16.49% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:TOY
Spin Master
21.70
-11.17
-33.98%
TSE:LNR
Linamar
44.21
-23.80
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TSE:ENB
Enbridge
58.67
14.39
32.51%
TSE:CNR
Canadian National Railway
132.07
-43.51
-24.78%
TSE:ATD
Alimentation Couche-Tard Inc
69.00
-5.72
-7.66%
Spin Master Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -30.31% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth and improvements in the Toy and Digital Games segments, while also addressing notable challenges in the Entertainment segment and specific underperformances within Digital Games and PAW Patrol. Despite these challenges, the strategic initiatives and strong free cash flow position the company well for future growth.Highlights
Record-Breaking Revenue and Growth
Total revenue for 2024 reached $2.3 billion, marking an increase of 18.8%, with a significant contribution of $375 million from Melissa & Doug. Q4 revenue was just under $650 million, up 29% year-over-year.
Strong Toy Segment Performance
Toy gross product sales in Q4 increased by 31.4% with Melissa & Doug's inclusion. Excluding Melissa & Doug, sales increased by 1%. Significant growth was noted in the preschool, infant, and toddler plush category, largely due to Melissa & Doug and Ms. Rachel.
Digital Games Improvement
Q4 revenue for Digital Games increased by 13.5% due to high in-game purchases and subscription growth. Toca Boca World showed a 22% sequential revenue increase from Q3.
Strong Free Cash Flow and Capital Return
Spin Master generated $175 million in free cash flow in Q4, a significant increase from $44 million in Q4 2023. The company returned $82 million to shareholders in 2024.
Lowlights
Decline in Entertainment Revenue
Entertainment revenue decreased by $13.9 million in Q4 and $31 million for 2024 due to fewer content deliveries compared to 2023.
Challenges in Digital Games
Despite improvements in Q4, the full year saw a decline in Digital Games revenue by just over $9 million. The Rubik's Match game did not meet expectations, leading to a wind-down of Nørdlight Studios.
PAW Patrol POS Decline
PAW Patrol experienced a decline in point-of-sale both in Q4 and for the full year 2024, though it remained the number one preschool toy property globally.
High Sales Allowances Impact EBITDA
Sales allowances were higher than planned at 13.4% for 2024, impacting EBITDA. Q4 saw a decrease in sales allowances compared to the previous year but was still higher than anticipated.
Company Guidance
During the fourth quarter and full year 2024 financial results conference call, Spin Master reported significant growth metrics, achieving total revenue of $2.3 billion, an 18.8% increase, with $375 million in incremental revenue from the Melissa & Doug acquisition. Fourth quarter revenue reached nearly $650 million, marking a 29% rise, driven by $130 million from Melissa & Doug. Despite challenges with PAW Patrol's decline in both Q4 and the full year, it remained the top preschool toy property globally. The company emphasized its strategic focus on cost synergies and revenue growth from Melissa & Doug, which significantly contributed to the preschool toy category. Spin Master also highlighted its Digital Games segment, which saw a 13.5% revenue increase in Q4, although full-year revenue declined due to earlier challenges. The company's 2025 outlook anticipates a 4% to 5% increase in consolidated Toy gross product sales, supported by a robust lineup of licensed products and international expansion of Melissa & Doug. The guidance for 2025 includes an expected adjusted EBITDA margin of 20% to 21%, reflecting continued investments in technology and strategic growth initiatives.Spin Master Corporate Events
Financial Disclosures
Spin Master to Announce Q1 2025 Financial Results
Neutral
Apr 3, 2025
Spin Master Corp. announced it will release its first quarter 2025 financial results on April 30, 2025, with a subsequent conference call hosted by its executives on May 1, 2025. This announcement is significant for stakeholders as it provides insights into the company’s financial health and strategic direction, potentially impacting its market positioning and investor relations.
Business Operations and StrategyFinancial Disclosures
Spin Master Reports Strong 2024 Financial Results with Revenue Surpassing $2.2 Billion
Positive
Feb 25, 2025
Spin Master Corp. reported a significant increase in revenue for 2024, reaching over $2.2 billion, an 18.8% rise from the previous year. The company’s strategic integration of Melissa & Doug contributed to this growth, with notable revenue and adjusted EBITDA increases. Spin Master also achieved substantial net cost synergies and maintained a strong cash flow, supporting its capital allocation strategy. Looking ahead, the company anticipates continued growth in toy sales and revenue, driven by innovation and a robust entertainment content pipeline.
Spin Master to Announce Q4 and Full Year 2024 Financial Results
Jan 15, 2025
Spin Master Corp. has announced that it will report its fourth quarter and full year 2024 financial results after the market closes on February 24, 2025. The announcement is significant for investors and stakeholders, as it provides insights into the company’s financial performance and strategic positioning in the competitive children’s entertainment industry. The subsequent conference call hosted by the company’s leadership will further discuss these results, offering a platform for engagement with the investment community.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.