MATTEL INC /DE/ (MAT): what the price assumes
In the published model solve dated 2026-Q2, anchored at $15.14, MATTEL INC /DE/ (MAT) is priced for -2.5% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/MAT
Headline
| Field | Value |
|---|---|
| Ticker | MAT |
| Company | MATTEL INC /DE/ |
| Current price | $15.14/sh |
| Composition | North America Region 56% / EMEA 25% / Latin America 11% / Asia Pacific 8% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 3.5% |
| Operating margin today | 7.8% |
| Margin compression (value-band) | -4.3pp |
| Implied growth | -2.5% |
| Multiple paid | 15x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 7.6% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.24σ |
| cohort percentile (of 212 peers) | 39 |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.80x | 4 | justifies |
| Earnings | 0.87x | 5 | justifies |
| Relative | 0.53x | 5 | justifies |
| Growth | 1.01x | 2 | expensive |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.0%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $22.73 | 0.67x | yes | Exit EV/EBITDA: 8.8x / 10.8x / 12.8x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $25.49 | 0.59x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.8x / 20.0x / 23.2x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $16.17 | 0.94x | yes | BV/sh $6.99, ROE (TTM) 21.4%, ke 9.3% |
| Two-Stage Excess Return | Asset | $24.41 | 0.62x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $11.21 | 1.35x | yes | Rev $5.5B, growth 4% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.8x / 0.9x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $30.12 | 0.50x | yes | EPS $1.34, growth 22% (input: historical EPS growth), PEG=0.45 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $20.20 | 0.75x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.61B × (1−21%) / WACC 6.0% → EPV (no growth) |
| Residual Income | Asset | $23.14 | 0.65x | yes | BV $6.99 + 5yr PV of (ROE (TTM) 21.4% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $14.52 | 1.04x | yes | √(22.5 × EPS $1.34 × BVPS $6.99) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $19.77 | 0.77x | yes | EBITDA $0.61B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $17.44 | 0.87x | yes | FCF $666.4M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $14.64 | 1.03x | yes | SBC-adj FCF $0.59B (FCF $0.67B − SBC $0.07B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $43.24 | 0.35x | yes | EPS $1.34 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $0.24 | 63.08x | yes | BV $6.99 × (ROIC 0.2% / WACC 6.0%) (excluded from median) |
| P/Sales Sector | Relative | $28.82 | 0.53x | yes | Revenue $5.49B × sector P/S 1.5x |
| PEG Fair Value | Relative | $45.18 | 0.34x | yes | EPS $1.34 × (PEG 1.5 × growth 22.5% (input: historical EPS growth)) → PE 33.7x |
| Earnings Yield | Earnings | $14.49 | 1.04x | yes | EPS $1.34 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $1.8b |
| Net debt / NOPAT (after-tax) | 5.34x |
| Net debt / operating income (pre-tax) | 4.22x |
| Interest coverage | 3.5x |
| Share count CAGR (buyback) | -5.3% |
| Burning cash | no |
Bullet Takeaways
Mattel is a mature IP and brand company, and the numbers should be read as a value name, not a growth one. The price embeds only about 4.5% operating-income growth, and every valuation family lands above the $14.05 quote.
Tariffs are the single biggest variable on the thesis. They cut Q1 2026 adjusted gross margin by 240 basis points and pushed the quarter to an adjusted loss, and the company is racing to move sourcing out of China.
The portfolio is a barbell. Hot Wheels vehicles grew 13% while Barbie-led dolls fell 11%, so the brand mix, plus a $1.5 billion buyback and a coming film slate, carries the story while tariffs pressure margins.
Bull Case
Frame Mattel correctly and the cheapness makes sense: this is a mature company that owns some of the most durable intellectual property in consumer products, and it should be valued on the longevity of those brands and its capital return, not on growth. Barbie, Hot Wheels, Fisher-Price, Uno, and the rest are evergreen franchises that have sold for decades, and the company is steadily turning them into a broader IP engine spanning film, games, and licensing. The 10-K lays out exactly this pivot, describing plans to "broaden content offering in film, television, and short-form content, accelerate licensing in consumer products, location-based entertainment, and publishing" (FY2025 10-K, accession 0001628280-26-010716). At $14.05 (June 27, 2026), the price embeds only about 4.5% operating-income growth, a low bar for a company with this brand depth.
The value support is unusually broad. Against the $14.05 price, all four valuation families, asset-based, earnings-power, relative-multiple, and growth-DCF, land above the price, and the blended X-ray figure across six methods sits near $25.23. That is a wide gap to fair value for a profitable business with a 9.2% operating margin. The recent operating data shows the brand engine still working: Q1 2026 net sales rose 4% to $862 million, with Hot Wheels vehicles up 13% and double-digit gains in Uno and Monster High, even as Barbie-led dolls fell 11%. The barbell mix is the point, because a diversified IP portfolio does not rise or fall on a single brand.
The capital return amplifies the value case. Mattel has repurchased roughly $1.2 billion of stock over three years and authorized another $1.5 billion, shrinking the share count about 4.3% a year, which compounds per-share value in a low-growth business trading below every valuation method. The film slate is the optional upside: Masters of the Universe and Toy Story 5 bring high-margin licensing royalties and a halo effect on physical toys at little incremental cost.
Bear Case
The external variable with the most leverage over Mattel is trade policy, and it is hitting the income statement right now. Toys are overwhelmingly manufactured in Asia, and tariffs on those imports flow straight to gross margin. In Q1 2026, adjusted gross margin fell 450 basis points to 45.1%, with tariffs alone responsible for 240 basis points, unfavorable foreign exchange for 140, and inflation for 90, pushing the quarter to an adjusted loss of $0.20 per share. The 10-K names the exposure directly, citing "supply chain inputs and increased labor costs" and "currency fluctuations, including movements in foreign exchange rates, which can lower Mattel's net revenues and earnings" (FY2025 10-K, accession 0001628280-26-010716). At a price the methods say is cheap, the cheapness exists precisely because the margin is under visible assault.
The mitigation itself carries risk. Mattel is reducing China sourcing from under 20% of US imports toward below 15%, then below 10% by 2027, relocating 500 SKUs in 2026. The 10-K cautions that this is not free, warning that "diverting production or sourcing away from a" given location creates execution risk amid "increased economic or geopolitical risks" (FY2025 10-K, accession 0001628280-26-010716). Moving a supply chain mid-tariff-war while protecting margins and price points is a difficult operational balance, and the alternative, raising prices, tests an already pressured consumer. CEO commentary about pricing actions is a tacit acknowledgment that some of the tariff cost lands on the buyer.
The demand and brand risks compound the macro pressure. Toys are discretionary, and a weak consumer cuts the category quickly; the Barbie franchise, a core profit engine, fell 11% in the quarter, showing that even Mattel's strongest brands cycle. Net debt of about $1.47 billion against trailing operating income near $497 million, with interest coverage of roughly 4 times, is manageable but not fortress-like for a cyclical hit by tariffs and a soft doll line. The bull case requires the film slate and Hot Wheels strength to offset Barbie softness while management successfully reroutes the supply chain and the consumer holds up. If tariffs persist and the consumer weakens, a cheap stock can stay cheap, with the margin pressure validating the discount rather than reversing it.
Valuation
Mattel screens as a clear value name across the board. Against the $14.05 price, all four valuation families, asset-based, earnings-power, relative-multiple, and growth-DCF, land above the price, and the blended X-ray figure across six methods sits near $25.23, well above the quote. The priced-in characterization is within range and explicitly value and asset-supported rather than a growth bet. When every method says the stock is worth more than it trades for, the discount is the thesis, and the question becomes why the gap exists and whether it closes.
The priced-in math is modest. The embedded assumption is roughly 4.5% operating-income growth against a current operating margin of 9.2% and an implied terminal margin near 3.4%. That low growth bar and conservative terminal margin reflect the tariff and cyclical overhang: the market is pricing Mattel for a difficult margin environment, not a reacceleration. The valuation does not lean on filing-sourced growth inputs; what the filings confirm is the brand and IP strategy and the supply-chain and currency risks that explain the discount (FY2025 10-K, accession 0001628280-26-010716).
The balance sheet is adequate. Net debt of about $1.47 billion sits at roughly three times operating income with interest coverage near 4 times, which is workable but leaves less cushion in a tariff-pressured year. The honest read is that the gap to fair value is real and wide, but it is wide for a reason: tariffs are actively compressing margin, and the methods are pricing today's depressed profitability. The risk is that the margin pressure proves durable, in which case the cheapness persists rather than resolves.
Catalysts
Q1 2026 results (reported April 2026) showed the tariff bite clearly. Net sales rose 4% to $862 million, ahead of expectations, with Hot Wheels vehicles up 13% and double-digit gains in Uno and Monster High, but dolls fell 11% on Barbie weakness. Adjusted gross margin dropped 450 basis points to 45.1%, driven by 240 basis points of tariff cost, 140 of unfavorable foreign exchange, and 90 of inflation, and adjusted EPS swung to a loss of $0.20. Management held annual sales and margin guidance and cited stabilizing US retailer ordering. The trajectory of gross margin as tariff mitigation ramps is the key near-term catalyst.
The supply-chain relocation is the structural catalyst to track. Mattel sources less than 20% of US imports from China and plans to cut that below 15% next year and below 10% by 2027, with 500 SKUs relocating in 2026. Evidence that this lowers tariff exposure without disrupting product availability or eroding price points would validate the bull case, while execution stumbles or further tariff escalation would deepen the margin pressure. Pricing actions in the US business are the other lever, and consumer response to those price increases is a watch item.
The film and IP slate is the optional upside, and capital return is the steady support. Theatrical releases of Masters of the Universe and Toy Story 5 are expected to generate high-margin licensing and a halo effect on toys, with two movies and a digital-games push framing the 2026 entertainment inflection. The $1.5 billion buyback continues to shrink the share count. Analyst sentiment is constructive but wary: across roughly 16 analysts the consensus is Buy with an average target near $18.50, UBS holds a Buy at $28, and Jefferies frames the stock as high-risk, high-return depending on US consumer stability and tariff exposure. The catalysts that would re-rate it are margin recovery as sourcing shifts, a strong film slate, and continued buybacks.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- HAS (HASBRO, INC.)
- FY2025 10-K: …the highest margin, highest growth opportunities in categories where we see significant share and/or underlying market growth. • Optimize Brands : Brands representing opportunities to maintain or grow share while improving operating profit returns. • Reinvent Brands : Brands representing opportunities to reinvent or…
- FY2025 10-K: …Corporate and Other. Refer to Note 1, Summary of Significant Accounting Policies, for further information. Items (i) and (ii) originally related to the Consumer Products segment; however, because the non-recurring nature of these adjustments are related to historical periods and not associated with the ongoing future…
- GOLF (Acushnet Holdings Corp.)
- FY2025 10-K: $1.7 million in selling expense, partially offset by a decrease of $1.0 million in advertising and promotion expenses. These operating expense changes include the impact of the $2.6 million benefit recognized during the year ended December 31, 2024 related to the PTO Policy Change. Golf Gear Segment Net sales in our…
- FY2025 10-K: …golfers, who are avid and skill‑biased, prioritize performance and commit the time, effort and money to improve their game. We believe that dedicated golfers are generally the most consistent purchasers of golf products, as we believe they are the most discerning and most likely to invest in premium performance…
- CALY (Callaway Golf Company)
- FY2025 10-K: …and accessories business, the Callaway soft goods business and the OGIO business, which consists of golf apparel and accessories (including golf bags), and storage gear for sport and personal use. This segment also includes royalties from licensing of our trademarks and service marks for various soft goods products.…
- FY2025 10-K: …brand names. The golf ball business, in particular, includes one competitor with an estimated U.S. market share of over 50%. New product introductions, price reductions, consignment sales, extended payment terms, "closeouts," including closeouts of products that were recently commercially successful, and significant…
- YETI (YETI Holdings, Inc.)
- FY2025 10-K: …product receipt, warehousing, certain limited product inspection activities, and coordinating outbound shipping. We manage our inventory levels by analyzing product sell-through, forecasting demand, and placing orders with our manufacturers before we receive firm orders from customers to ensure sufficient…
- FY2025 10-K: …business. Similar to our strategy in 2025, we will strive to mitigate the impact of tariffs by managing operating expenses, working capital and cash; negotiating with suppliers; evaluating pricing strategies; leveraging tariff exemptions where possible; and pursuing other supply chain optimization activities.…
- PTON (Peloton Interactive, Inc.)
- FY2025 10-K: …information is presented in the same manner that the chief operating decision maker ("CODM"), the Chief Executive Officer and President, reviews the operating results in assessing performance and allocating resources. The CODM reviews consolidated revenue and gross profit for both of the reportable segments,…
- FY2025 10-K: …and services, which could lead to lower revenue or increased costs, or both; • increases in marketing, sales, and other operating expenses; • short-term expenditures and initiatives we may undertake in furtherance of long-term cost savings, including the Restructuring Plans; • our reliance on third-party delivery and…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.