Should you sell your Mattel stock?

Mattel (Mattel Stock Quote, Chart, News, Analysts, Financials NASDAQ:MAT) shares fell more than 30% in after-hours trading following weaker-than-expected fourth-quarter results and soft 2026 guidance, and Roth analyst Eric Handler has lowered his price target.

In a Feb. 11 report, Handler maintained his “Neutral” rating but cut his 12-month target to $16.00 from $22.00, based on 2026 multiples of 13-times EPS and 7.5-times Adjusted EBITDA.

“Hopes for a strong year are dashed as organic, constant currency net sales for 2026 now appear on track for sub-2% growth,” Handler said, adding that $150-million in strategic investments will likely pressure adjusted operating income and EPS this year, with a potential payoff in 2027.

For the fourth quarter, Mattel reported net sales of $1.767-billion, down 6% year-over-year, and EPS of $0.39, both well below Handler’s and consensus estimates. Vehicles, led by Hot Wheels, rose 20%, while Challenger Brands increased 16% and Dolls grew 2%. Infant, Toddler & Preschool declined 8% due to strategic exits.

Gross margin fell to 46.0% from 50.8% a year earlier, reflecting higher discounts, tariffs and inflation, partially offset by cost savings. Adjusted operating margin declined to 9.1% from 9.8%.

Handler forecasts 2026 net sales of $5.641-billion, up 5.5%, with more than half of the growth driven by M&A and foreign exchange tailwinds.

He lowered his 2026 EPS estimate to $1.25 from $1.70, reflecting sub-2% organic growth and the impact of planned investments.

Mattel also announced it will acquire the remaining 50% of its mobile-game studio, Mattel163, from joint venture partner NetEase, valuing the business at $318-million. Handler expects the deal to close by the end of Q1 and to be immediately accretive.

Management is guiding to mid- to high-single-digit revenue growth and double-digit adjusted operating income growth in 2027, supported by returns on 2026 investments and new licensing tied to upcoming movie releases.

Handler now expects Mattel to generate $876.0-million in Adjusted EBITDA on revenue of $5.641-billion in fiscal 2026, improving to $946.9-million in Adjusted EBITDA on revenue of $6.041-billion in fiscal 2027.

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