NEW YORK (TheStreet) -- LeapFrog Enterprises (LF) will attempt to capitalize on their success of making popular toys by creating children's versions of adult gadgets by trying to do the same thing with video game consoles, Bloomberg reports.
The company today unveiled its first educational, active video gaming system, LeapTV.
LeapTV is designed from the ground up specifically for children ages three to eight years old. The new video game console system changes the way children learn by combining activity and movement with best-in-class educational curriculum, the company said.
Shares of LeapFrog are down -2.13% to $7.34.
TheStreet Ratings team rates LEAPFROG ENTERPRISES INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LEAPFROG ENTERPRISES INC (LF) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LF has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.66, which clearly demonstrates the ability to cover short-term cash needs.
- 37.13% is the gross profit margin for LEAPFROG ENTERPRISES INC which we consider to be strong. Regardless of LF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LF's net profit margin of -20.12% significantly underperformed when compared to the industry average.
- The revenue fell significantly faster than the industry average of 5.0%. Since the same quarter one year prior, revenues fell by 31.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Leisure Equipment & Products industry and the overall market on the basis of return on equity, LEAPFROG ENTERPRISES INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: LF Ratings Report