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Spin Master (TSE:TOY)
TSX:TOY

Spin Master (TOY) AI Stock Analysis

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TS

Spin Master

(TSX:TOY)

71Outperform
Spin Master's solid financial performance and strategic initiatives are partially offset by bearish technical indicators and tariff uncertainties. The stock's fair valuation and positive corporate developments provide a balanced outlook, though attention to declining profit margins and external risks is warranted.
Positive Factors
Market Reach
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
Foreign Exchange
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.
Product Prioritization
Paw Patrol is a top priority and its ongoing popularity is expected to increase with new seasons and special releases on popular platforms like Netflix and YouTube.
Revenue Projections
Melissa and Doug gross revenue may exceed the company’s guidance as the Ms. Rachel launch continues to gain momentum.

Spin Master (TOY) vs. S&P 500 (SPY)

Spin Master Business Overview & Revenue Model

Company DescriptionSpin Master Corp. is a global children's entertainment company known for its innovative approach to toys, entertainment, and digital games. The company operates in three main segments: Toys, Entertainment, and Digital Games. Spin Master is recognized for creating popular brands such as PAW Patrol, Hatchimals, and Bakugan, among others. The company's diverse portfolio includes a wide range of products that cater to various age groups and interests, positioning it as a leader in the toy industry.
How the Company Makes MoneySpin Master generates revenue through the design, manufacture, and sale of a variety of consumer products primarily in the toy industry. The core revenue stream is derived from the sales of toys and games, which are distributed globally across several retail and online channels. Additionally, the company monetizes its entertainment segment through the production and distribution of children's television programming, leveraging popular IPs like PAW Patrol. Spin Master also earns revenue from licensing agreements, where it licenses its brands and characters to other companies for use in consumer products. The digital games segment contributes to its earnings by developing and selling mobile games, often based on its existing toy brands. Strategic partnerships and collaborations with leading entertainment and retail companies further enhance Spin Master's market presence and revenue potential.

Spin Master Financial Statement Overview

Summary
Spin Master demonstrates strong revenue growth and efficient operational management. The balance sheet reflects a stable equity base and manageable leverage, although rising liabilities pose a risk. Cash flow statements highlight robust cash generation, but increased capital expenditure requires careful management.
Income Statement
75
Positive
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.
Balance Sheet
70
Positive
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.
Cash Flow
68
Positive
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.26B1.90B2.02B2.04B1.57B
Gross Profit
1.19B1.04B1.10B1.06B727.90M
EBIT
165.50M188.90M343.30M276.00M47.50M
EBITDA
295.70M336.40M373.30M379.90M150.50M
Net Income Common Stockholders
81.90M151.40M261.30M198.60M45.50M
Balance SheetCash, Cash Equivalents and Short-Term Investments
225.80M705.70M644.30M562.70M320.60M
Total Assets
2.63B1.99B1.79B1.74B1.34B
Total Debt
534.40M62.10M71.20M73.00M74.40M
Net Debt
308.60M-643.60M-573.10M-489.70M-246.20M
Total Liabilities
1.23B570.60M550.00M684.30M499.20M
Stockholders Equity
1.40B1.42B1.24B1.05B842.90M
Cash FlowFree Cash Flow
210.40M119.60M149.90M339.60M229.70M
Operating Cash Flow
328.00M227.00M249.30M419.10M310.80M
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

Technical Analysis Sentiment
Negative
Last Price22.94
Price Trends
50DMA
24.77
Negative
100DMA
28.36
Negative
200DMA
29.79
Negative
Market Momentum
MACD
-0.38
Negative
RSI
45.06
Neutral
STOCH
50.65
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 22.94 is above the 20-day moving average (MA) of 22.83, below the 50-day MA of 24.77, and below the 200-day MA of 29.79, indicating a neutral trend. The MACD of -0.38 indicates Negative momentum. The RSI at 45.06 is Neutral, neither overbought nor oversold. The STOCH value of 50.65 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSENB
76
Outperform
C$141.06B27.648.63%5.66%24.95%-17.19%
TSATD
76
Outperform
C$67.72B19.0218.66%1.03%11.62%-8.08%
TSLNR
74
Outperform
$3.13B12.464.98%1.93%8.72%-48.78%
TSCNR
74
Outperform
$87.81B19.9721.72%2.43%1.30%-18.15%
TSTOY
71
Outperform
C$2.34B21.128.04%2.09%21.55%16.28%
61
Neutral
$6.65B11.713.09%3.98%2.65%-20.82%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:TOY
Spin Master
22.94
-6.80
-22.86%
TSE:LNR
Linamar
52.29
-10.67
-16.94%
TSE:ENB
Enbridge
64.73
17.74
37.74%
TSE:CNR
Canadian National Railway
139.98
-28.75
-17.04%
TSE:ATD
Alimentation Couche-Tard Inc
71.43
-3.09
-4.15%

Spin Master Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: -5.91%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
Spin Master demonstrated strong revenue growth and strategic moves in digital games, but faces challenges with U.S. POS decline, tariff impacts, and decreased entertainment revenue. Mitigation strategies are in place, but uncertainty around tariffs leads to the withdrawal of 2025 guidance.
Q1-2025 Updates
Positive Updates
Revenue and Profitability Increase
Spin Master reported a 13.6% increase in revenue to $359 million and an adjusted EBITDA of $21.6 million, up $3 million year-over-year for Q1 2025.
Toy Segment Growth
Toy gross product sales increased by 18.8% year-over-year, driven by innovation, growth in the licensed portfolio, and brands such as Melissa & Doug.
Digital Games Revenue Surge
Digital Games revenue grew by 3.9% to $47.8 million, with an increase in in-game purchases and subscriptions, leading to the highest revenue for digital games in the past 8 quarters.
Strong Financial Position
Spin Master ended Q1 with $153 million in cash, a leverage ratio of 0.8x, and a combined cash balance and credit facility availability of over $500 million.
Successful Cost Management
Achieved $6.5 million in net cost synergies from Melissa & Doug, with an annual target of $25 million to $30 million by the end of 2026.
Negative Updates
U.S. POS Decline
Spin Master's POS declined by 6.4%, while the industry saw a growth of 1.1%, largely due to categories Spin Master does not compete in.
Tariff Impact and Guidance Withdrawal
The U.S. tariffs on China and other countries have introduced significant uncertainty, leading Spin Master to withdraw its 2025 guidance.
Entertainment Revenue Decline
Entertainment revenue decreased by $6 million or 13.7%, due to lower distribution revenue from the PAW Patrol series and movie.
Increased Costs in Digital Games
Digital Games adjusted operating income declined by $5.7 million, with margins decreasing from 33% to 19.9% due to investments in paid user acquisition.
Company Guidance
During the first quarter of 2025, Spin Master Corp. reported a 13.6% increase in revenue to $359 million and an adjusted EBITDA of $21.6 million, up $3 million from the previous year. The toy gross product sales saw an 18.8% increase, with revenue reaching $273.7 million. However, Spin Master's point of sale (POS) performance was down 6.4%, in contrast to the industry's 1.1% increase. The company maintained its leadership in the infant toddler preschool category and recorded growth in its digital games segment, with Toca Boca ending Q1 with 58 million monthly active users (MAU) and Piknik subscriptions growing by 13% to 488,000. Despite these gains, due to uncertainties surrounding potential U.S. tariffs on Chinese and other imports, Spin Master withdrew its 2025 guidance. The company is implementing mitigation strategies including diversifying its supply chain, aiming to produce 70% of toys for the U.S. market outside of China by the end of 2025.

Spin Master Corporate Events

Executive/Board Changes
Spin Master Appoints New CFO as Mark Segal Retires
Positive
May 1, 2025

Spin Master Corp. announced the appointment of Jonathan Roiter as the new Executive Vice President and Chief Financial Officer, succeeding Mark Segal who is retiring. Roiter, who brings extensive experience in finance and operational leadership, is expected to enhance Spin Master’s focus on long-term shareholder value. His background in the consumer-packaged goods industry and previous roles in public companies are anticipated to strengthen the company’s financial foundation and drive growth.

Spark’s Take on TSE:TOY Stock

According to Spark, TipRanks’ AI Analyst, TSE:TOY is a Neutral.

Spin Master’s robust revenue growth and strategic acquisitions are key strengths, contributing to a strong financial position. However, declining profit margins and rising liabilities are notable risks. The technical analysis suggests potential short-term volatility, while the company’s fair valuation and positive earnings call sentiment provide a balanced outlook.

To see Spark’s full report on TSE:TOY stock, click here.

Executive/Board ChangesShareholder Meetings
Spin Master Corp. Welcomes Gary Vaynerchuk to Board of Directors
Positive
May 1, 2025

Spin Master Corp. announced the election of Gary Vaynerchuk to its Board of Directors during the company’s Annual Meeting of Shareholders. Vaynerchuk, a prominent figure in digital marketing and social media, is expected to bring his entrepreneurial expertise and forward-thinking approach to support Spin Master’s ongoing innovation and connection with children and families. His addition to the board is anticipated to enhance the company’s strategic direction and industry positioning.

Spark’s Take on TSE:TOY Stock

According to Spark, TipRanks’ AI Analyst, TSE:TOY is a Neutral.

Spin Master’s robust revenue growth and strategic acquisitions are key strengths, contributing to a strong financial position. However, declining profit margins and rising liabilities are notable risks. The technical analysis suggests potential short-term volatility, while the company’s fair valuation and positive earnings call sentiment provide a balanced outlook.

To see Spark’s full report on TSE:TOY stock, click here.

Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Spin Master Corp. Reports Strong Q1 2025 Amid Tariff Uncertainties
Positive
Apr 30, 2025

Spin Master Corp. reported a strong start to 2025 with a 13.6% increase in revenue for Q1, driven by robust performance in its Toys and Digital Games segments. Despite the challenges posed by potential U.S. tariffs, the company managed to reduce its net debt by over $70 million and continues to focus on cost management and sourcing strategies to mitigate impacts. The company has withdrawn its 2025 outlook due to uncertainties in global tariff policies but remains committed to its strategic initiatives and shareholder returns through share repurchases and dividends.

Spark’s Take on TSE:TOY Stock

According to Spark, TipRanks’ AI Analyst, TSE:TOY is a Neutral.

Spin Master’s overall score reflects its robust revenue growth and strategic acquisition benefits, offset by bearish technical indicators and declining net profit margins. The company’s fair valuation and strong cash flow are positive, but attention to rising liabilities and effective capital expenditure management remain critical for sustainable growth prospects.

To see Spark’s full report on TSE:TOY stock, click here.

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.

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.