Let’s dig into the relative performance of GoPro (NASDAQ:GPRO) and its peers as we unravel the now-completed Q2 toys and electronics earnings season.
The toys and electronics industry presents both opportunities and challenges for investors. Established companies often enjoy strong brand recognition and customer loyalty while smaller players can carve out a niche if they develop a viral, hit new product. The downside, however, is that success can be short-lived because the industry is very competitive: the barriers to entry for developing a new toy are low, which can lead to pricing pressures and reduced profit margins, and the rapid pace of technological advancements necessitates continuous product updates, increasing research and development costs, and shortening product life cycles for electronics companies. Furthermore, these players must navigate various regulatory requirements, especially regarding product safety, which can pose operational challenges and potential legal risks.
The 6 toys and electronics stocks we track reported a solid Q2. As a group, revenues beat analysts’ consensus estimates by 3.9% while next quarter’s revenue guidance was 4% below.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. Thankfully, toys and electronics stocks have been resilient with share prices up 8.6% on average since the latest earnings results.
GoPro (NASDAQ:GPRO) Known for sponsoring extreme athletes, GoPro (NASDAQ:GPRO) is a camera company known for its POV videos and editing software.
GoPro reported revenues of $186.2 million, down 22.7% year on year. This print exceeded analysts’ expectations by 9.5%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ cameras sold estimates but a miss of analysts’ earnings estimates.
"Our rollout of new products starts next month with the launch of our new, significantly enhanced flagship camera, HERO13 Black, along with our new $199 entry-level HERO camera that features an entirely new design that we fully expect to wow both new and existing customers," said Nicholas Woodman, GoPro's founder and CEO.
GoPro achieved the biggest analyst estimates beat but had the slowest revenue growth of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 12% since reporting and currently trades at $66.60.
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Best Q2: Hasbro (NASDAQ:HAS) Credited with the creation of toys such as Mr. Potato Head and the Rubik’s Cube, Hasbro (NASDAQ:HAS) is a global entertainment company offering a diverse range of toys, games, and multimedia experiences for children and families.
Hasbro reported revenues of $995.3 million, down 17.7% year on year, outperforming analysts’ expectations by 5.5%. It was a strong quarter for the company with an impressive beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 12% since reporting. It currently trades at $66.60.
Mattel (NASDAQ:MAT) Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ:MAT) is a global children's entertainment company specializing in the design and production of consumer products.
Mattel reported revenues of $1.08 billion, flat year on year, falling short of analysts’ expectations by 1.8%. It was a mixed quarter for the company with a decent beat of analysts’ earnings estimates.
Mattel posted the weakest performance against analyst estimates in the group. Interestingly, the stock is up 11.1% since the results and currently trades at $19.17.
Bark (NYSE:BARK) Making a name for itself with the BarkBox, Bark (NYSE:BARK) specializes in subscription-based, personalized pet products.
Bark reported revenues of $116.2 million, down 3.6% year on year, surpassing analysts’ expectations by 1.7%. Revenue aside, it was a solid quarter for the company with an impressive beat of analysts’ earnings estimates and revenue guidance for next quarter beating analysts’ expectations.
Bark had the weakest full-year guidance update among its peers. The stock is up 26.7% since reporting and currently trades at $1.66.
Sonos (NASDAQ:SONO) A pioneer in connected home audio systems, Sonos (NASDAQ:SONO) offers a range of premium wireless speakers and sound systems.
Sonos reported revenues of $397.1 million, up 6.4% year on year, surpassing analysts’ expectations by 1.5%. Taking a step back, it was a very strong quarter for the company with an impressive beat of analysts’ earnings estimates.
Sonos achieved the fastest revenue growth among its peers. The stock is down 2% since reporting and currently trades at $11.73.
This content was originally published on Stock Story
