Is JAKKS Pacific, Inc. overvalued or undervalued?

As of 13 March 2025, JAKKS Pacific, Inc. has moved from a fair to an attractive valuation grade, indicating a positive shift in its market perception. The company is currently considered undervalued, with a P/E ratio of 5, significantly lower than the industry average, and an EV to EBITDA ratio of 2.85. Additionally, the PEG ratio stands at a compelling 0.36, suggesting that the stock is priced attractively relative to its growth potential.
When compared to peers, JAKKS Pacific, Inc. shows a stark contrast to Sturm, Ruger & Co., Inc., which is deemed very expensive with a P/E of 27.74, and Marine Products Corp., which is very attractive with a P/E of 21.79. JAKKS Pacific's strong ROCE of 30.96% and ROE of 19.63% further underscore its operational efficiency and profitability relative to its peers. Despite recent stock performance lagging behind the S&P 500 year-to-date, the long-term returns of 169.01% over five years highlight its potential for growth, reinforcing the undervaluation narrative.