The shares of Mattel, Inc. (NASDAQ:MAT) and ReShape Lifesciences Inc. (NASDAQ:RSLS) were among the active stocks of the last trading sessions. Mattel, Inc. (NASDAQ:MAT) soared to 0.21% closing at the price of $14.55 whereas the shares of ReShape Lifesciences Inc. (NASDAQ:RSLS) declined -3.59% with the decrease of -0.01 points closing at the price of $0.03. Mattel, Inc. has currently increase 7.62% in its stock over the period of 6-months while its rival ReShape Lifesciences Inc. subtracted -99.66% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Mattel, Inc. (NASDAQ:MAT) is -22.8% while the ROI of ReShape Lifesciences Inc. (NASDAQ:RSLS) is -41.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MAT’s EBITDA Margin is -46.55 whereas RSLS’s is 0.02.
Both the profitability ratios suggest a mixed sentiment for Mattel, Inc. (NASDAQ:MAT) and ReShape Lifesciences Inc. (NASDAQ:RSLS).
EPS & Surprise Factor
Mattel, Inc. (NASDAQ:MAT) reported $-0.56/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.3/share Thus lagging the analyst Estimates with a Surprise Factor of -86.7 Percent. While, ReShape Lifesciences Inc. (NASDAQ:RSLS) reported EPS of $-4.8/share in the last quarter. The analysts projected EPS of $-1.79/share depicting a Surprise of -168.2 Percent.
Taking a look at Earnings per Share, Mattel, Inc. tends to be beating the analyst estimates more than ReShape Lifesciences Inc.. so MAT is more profitable than RSLS.
Technical Analysis of Mattel, Inc. & ReShape Lifesciences Inc.
Moving average convergence divergence (MACD) shows that Mattel, Inc. (NASDAQ:MAT) is on a PRICE RELATIVITY trend While ReShape Lifesciences Inc. (NASDAQ:RSLS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Mattel, Inc. was in BEARISH territory and ReShape Lifesciences Inc. was in BEARISH territory.
MAT’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While RSLS’s candle is NEUTRAL with MEDIUM.
EPS Growth Rate: MAT’s 10% versus RSLS’s 0.24%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Mattel, Inc. (NASDAQ:MAT) is predicted at 10% while ReShape Lifesciences Inc. (NASDAQ:RSLS) stands at 0.24%. These numbers suggest that MAT is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of MAT stands at 1.9 while RSLS is at 0.6 whereas the debt ratio of the prior is 4.41 while the debt ratio of the later is 0.
The values of the both ratios suggest that MAT is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.8 for MAT and 3 for RSLS which means MAT has Hold rating whereas RSLS has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for MAT is $15.35 which is 5.21% of its current price while RSLS has price target of 32 which is 99.91% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
MAT currently has price to earning P/E ratio of 0 whereas RSLS has 0 while the forward P/E ratio for the prior stands at 67.36 and for the later it depicts the value of 0.
The price to Book P/B for MAT is 7.54, Price to Sale is at 1.06 and for RSLS these ratios stand at 0 and 1.07.