Hasbro
The company behind Monopoly, Nerf and Transformers, which now earns most of its profit from one trading card game, Magic: The Gathering.
The scores
Growth3/4 ↓
Revenue rose 13.7% in 2025 and 15% this year, almost all from Magic; management guides Wizards to single digits in 2027.
Business quality3/4 ↑
Magic's stores and players' collections hold it, earning near half of sales as profit, but Pokémon and newer card games grow faster.
Financial position3/4 ↑
It owes about $2.1B more than its cash, under 1.5 times guided yearly profit before interest and charges; the 2026 and 2027 notes are funded.
Execution record3/4 ↑
Guidance raised twice this year and eight straight beats, against a $1.02B toy write-down, a $56.4M game write-off and an unreplaced Wizards head.
Per share capture3/4 ↑
Buybacks of $149M in nine months roughly matched share awards, so the count held flat; the doubled $400M target could start shrinking it.
Potential2/4 →
The upside is Magic holding its new level plus two unproven games; nothing is contracted and the category's boom is not Hasbro's to control.
Risk profile3/4 →
One serious concentration: nine-tenths of profit rests on one game whose supply was doubted in 2022; a fifth of sales go to two retailers.
Valuation3/4 ↓
About 17 times 2026 earnings that consensus expects to hold in 2027: fair if Magic's plateau holds, dear if this is the peak.
Evidence quality3/4 →
Segments, Magic revenue, debt and pay are filed; category data is Circana's and ICv2's via trade press, and the games rest on management.
If it works 0.9× · if it fails you keep about 87%.
The Verdict
We rate Hasbro Neutral. The business is solid: Magic: The Gathering, a card game with players and stores loyal to it, now earns about nine-tenths of the profit, while the toys earn little. The price is fair: about 17 times this year's expected profit, for profit analysts expect to stand still next year. That pays for Magic holding its new record level and nothing for a fall. As a bet on its two new video games it is expensive but defensive: the games could add little to today's value, and if they flop shareholders still keep most of it.
The long caseIf Hasbro's own studios can turn its fantasy and science-fiction worlds into hit console games, it owns a second business beside the cards rather than renting its brands out.
The evidence under this - 6 claims
Corporate costs sit outside the segments, and the $55M of tariff refunds lifted Consumer Products more than Wizards.
Management also said Magic would have grown 8% to 10% in Q4 without the shift, and that all six 2027 sets carry a full product suite.
Circana measures US retail sales of a broad category while Hasbro reports worldwide wholesale Magic revenue, so the two rates are not strictly comparable.
The six-year median P/E is 26 (C30), so on its own history the shares look cheap, though that median was struck on years of depressed earnings.
The company
Hasbro makes Magic: The Gathering, the oldest strategy card game, along with Dungeons & Dragons, Monopoly, Nerf, Transformers and Peppa Pig toys, and it licenses its brands to other companies.
A Magic player buys packs of randomly sorted cards to build a deck and play others, often at weekly events in one of more than 13,000 shops. Sets built around other famous worlds, such as Final Fantasy, Marvel and The Hobbit, draw in fans who never played before.
The evidence under this - 4 claims
Store and player counts are management's alone and include stores newly added to the network; ICv2 says retailer restocking lifted 2025 sell-in (C12).
Royalties rise with licensed sets, so growth built on other companies' worlds keeps less of each dollar than Magic's own sets.
About $40M of the quarter's Magic sales had been expected in the fourth quarter (C08).
How it makes money
A dollar arrives when a shop, a distributor or a retailer such as Amazon or Walmart buys cards or toys to sell on. In the first nine months of 2026 Magic alone brought $1.63B of $3.74B in sales. Each card set is cheap to print and sells at a high price, so Wizards keeps close to half of its sales as profit, while the toys keep only a few cents per dollar. Licences such as Monopoly Go! add fees.
The evidence under this - 4 claims
Corporate costs sit outside the segments, and the $55M of tariff refunds lifted Consumer Products more than Wizards.
Royalties rise with licensed sets, so growth built on other companies' worlds keeps less of each dollar than Magic's own sets.
Where the money comes from, stream by stream
| Stream | Share of sales (nine months 2026) | How it earns it |
|---|---|---|
| Magic: The Gathering | about 44% | Booster packs, decks and premium products, sold through hobby stores, mass retail and online, plus Magic's digital games. |
| Other Wizards games | about 10% | Dungeons & Dragons and digital and licensed games such as Monopoly Go!, from which Hasbro takes a licence fee. |
| Consumer Products | about 45% | Toys and board games such as Nerf, Transformers, Peppa Pig and Monopoly, sold to retailers, and licences of Hasbro brands. |
| Entertainment | about 2% | Film and television from Hasbro's family brands. |
Who runs it
Chris Cocks has run Hasbro since 2022, after leading Wizards of the Coast. Gina Goetter runs finance and operations. John Hight, who led Wizards through Magic's record 2025, stepped down in September 2026, and no successor has been named.
Directors and officers own under 1% of the shares. The chief executive's bonus rests on sales and operating profit and his share awards on earnings per share. Insiders sold about 497,000 shares in the past year and bought none.
The evidence under this - 4 claims
Most of the chief executive's sales followed option exercises, which turn expiring awards into shares rather than reflect a view.
Why it wins, and who could beat it
Why customers come back
A card game is worth playing where other people play it. Magic has weekly events in more than 13,000 shops, and players' collections only work in Magic, so leaving means starting again. Management says organized-play players this year already outnumber all of 2024 by more than 40%.
That hold is real but not proof of winning. Across the US toy market, the category trading cards lead grew faster than Magic in 2026, so other card games are gaining players too.
The evidence under this - 5 claims
Store and player counts are management's alone and include stores newly added to the network; ICv2 says retailer restocking lifted 2025 sell-in (C12).
Circana also named affordability, tariffs and price increases as risks for the holiday season.
Circana measures US retail sales of a broad category while Hasbro reports worldwide wholesale Magic revenue, so the two rates are not strictly comparable.
ICv2 says part of the growth was retailers restocking after holding thin inventories into the 2025 holiday, which flatters sell-in.
The threat
The Pokémon card game is the biggest rival and Pokémon is the world's top toy brand. Newer games such as One Piece and Disney's Lorcana fight for the same shop shelves and players. In toys, Mattel, LEGO and Spin Master compete for the same gift money, and Mattel's own filing names Hasbro as a rival.
The evidence under this - 3 claims
ICv2 says part of the growth was retailers restocking after holding thin inventories into the 2025 holiday, which flatters sell-in.
The rivals: MAT, MSFT, SONY, TTWO, and 4 more that are private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| Private | The Pokémon Company (Pokémon Trading Card Game)Priced against it: Private | Wizards tabletop and licensed games | On sale | Private |
| Bandai Namco (One Piece Card Game)Priced against it: Listed abroad | Wizards tabletop and licensed games | On sale | Listed abroad | |
| Private | Ravensburger with Disney (Disney Lorcana)Priced against it: Private | Wizards tabletop and licensed games | On sale | Private |
| MAT | Mattel (Barbie, Hot Wheels, UNO)Priced against it: One segment only | Consumer Products | On sale | One segment only |
| LEGO and Spin MasterPriced against it: Listed abroad | Consumer Products | On sale | Listed abroad | |
| MSFT · SONY · TTWO | Other publishers' role-playing games (Microsoft's and Sony's studios, Take-Two, Larian's Baldur's Gate 3)Priced against it: Not checked | Owned video games (Exodus and Warlock) | On sale | Not checked |
How big it could get
How big this could get
In the US and Canada, hobby shops sold $3.66B of games in 2025, up 40%, and trading card games were about two-thirds of that. Toy sales worldwide grew 7% in 2025 and US toy sales 17% in the first half of 2026, led by trading cards.
Nobody publishes how much of the card market is Magic's, so the room left to grow is not known.
The evidence under this - 4 claims
ICv2 says part of the growth was retailers restocking after holding thin inventories into the 2025 holiday, which flatters sell-in.
Circana also named affordability, tariffs and price increases as risks for the holiday season.
Corporate costs sit outside the segments, and the $55M of tariff refunds lifted Consumer Products more than Wizards.
The results
The numbers
Sales grew 17% over the twelve months to Jun 2026, about the same pace as the 14% in the year to Dec 2025.
Operating margin is 23%, up from −31% in the year to Dec 2023.
Running costs take 49¢ of each sales dollar, down from 58¢ in the year to Dec 2021.
Each dollar put into the business earns 23% a year after tax, up from 7.6% in the year to Dec 2021.
It turned 24% of sales into free cash, $1.21B over the last twelve months.
Yearly sales growth has ranged from −17% to +17% over the last 5 years, with sales falling in 3 of them.
The share count rose 3.4% in 4.5 years, and pay in shares costs 1.9% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-23. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Jun 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $6.42B | $5.86B | $5.00B | $4.14B | $4.70B | $4.97B |
| Sales growth | +17% | −8.8% | −15% | −17% | +14% | +17% |
| Profit | ||||||
| Gross margin | 70% | 67% | 66% | 71% | 72% | 72% |
| Operating margin | 12% | 7.0% | −31% | 17% | 0.2% | 23% |
| Net margin | 6.7% | 3.5% | −30% | 9.3% | −6.9% | 16% |
| What growth costs, per sales dollar | ||||||
| Research and development | 4.9% | 5.3% | 6.1% | 7.1% | 8.2% | 8.0% |
| Selling, general and admin | 22% | 28% | 30% | 29% | 25% | 25% |
| Pay in shares | 1.5% | 1.4% | 1.4% | 1.2% | 1.7% | 1.9% |
| Capital spending | 2.1% | 2.2% | 2.7% | 2.1% | 1.3% | 1.5% |
| Cash | ||||||
| Cash from operations | $818M | $373M | $726M | $847M | $893M | $1.29B |
| Free cash flow | $685M | $245M | $590M | $760M | $830M | $1.21B |
| Balance sheet | ||||||
| Debt | $4.03B | $3.97B | $3.47B | $3.38B | $3.26B | $3.54B |
| Returns and shares | ||||||
| Return on capital | 7.6% | 4.5% | - | 12% | - | 23% |
| Shares (diluted) | 138M | 139M | 139M | 140M | 140M | 143M |
What growth costs
Growth has so far widened the margin: Wizards' profit rose a little faster than its sales this year. The cost to watch is the two video games, whose spending has been held on the balance sheet. Once they launch in 2027 that cost is charged against profit, and management expects Wizards' margin to fall to the high 30s per dollar of sales.
The evidence under this - 4 claims
Corporate costs sit outside the segments, and the $55M of tariff refunds lifted Consumer Products more than Wizards.
Capitalized game cost kept rising through 2025 (C21), and a write-off in Q2 2026 (C22) shows the spending curve can turn into charges rather than savings.
The last report (20 Oct)
Quarter ended June 2026, filed figures.
In the third quarter of 2026 sales rose 15% to $1.60B. Magic passed $600M in a quarter for the first time, up 34%, and Wizards kept 49 cents of each sales dollar as operating profit. Toys grew 4%, helped by $48M of refunds of tariffs the courts struck down.
Management raised its 2026 forecast for the second time this year. It also said about $40M of Magic sales arrived early, so the fourth quarter should be slightly down, and Wizards should grow only in single digits in 2027, about 5% to 9%.
What it did to the thesisIt confirmed Magic's record level and the toys' recovery, but did not settle the question the view rests on: management itself expects Magic's growth to slow sharply, so whether this is a plateau or a peak is left to 2027.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $2.90 against $1.86 expected.
The evidence under this - 5 claims
About $40M of the quarter's Magic sales had been expected in the fourth quarter (C08).
Corporate costs sit outside the segments, and the $55M of tariff refunds lifted Consumer Products more than Wizards.
Nine months already grew 15% (C04), so the full-year range implies a fourth quarter that grows little or falls.
Management also said Magic would have grown 8% to 10% in Q4 without the shift, and that all six 2027 sets carry a full product suite.
What management did with the money
Hasbro paid a dividend each quarter, bought back $149M of its own shares in nine months and doubled this year's buyback target to $400M. It borrowed $400M to repay notes due this November, and cut its video game plans, writing off $56.4M of titles planned for 2028 and later.
Insiders in 2026Q3: 6 purchases and 16 sales, from their Form 4 filings.
The evidence under this - 4 claims
Nine months bought only $149M, so reaching $400M needs about $250M in one quarter, while the diluted count barely fell (C30).
The price, and where we disagree
In short. Fair. The price pays for Magic's record level holding into 2027, and allows nothing for a fall back.
The shares rose about 57% in a year and 11% on the day of the latest results, and about half of the last six months' rise came from buyers paying more for each dollar of sales rather than from sales growing.
The next tests are dated. Full-year results, expected on 9 February 2027, show whether Magic's fourth quarter fell only as forecast and what Hasbro expects for 2027. The first video game, Exodus, launches on 7 April 2027.
The evidence under this - 4 claims
Management also said Magic would have grown 8% to 10% in Q4 without the shift, and that all six 2027 sets carry a full product suite.
Titles beyond 2027 were cancelled in Q2 (C22), and neither game has a price or sales target.
How we read the multiple
A buyer is paying for profit to hold at this year's record. If Magic slips back, the same price buys a lot less profit.
- Analysts expect profit of $6.76 a share this year and $6.87 next year.
- At $117.23, a share costs about 17 times this year's expected profit.
- Profit that barely grows in 2027 means the buyer is paying for today's level to last.
Against its own history. The shares cost less per dollar of profit than usual, but only because profit is at a record after years when it was much lower.
The evidence under this - 3 claims
The six-year median P/E is 26 (C30), so on its own history the shares look cheap, though that median was struck on years of depressed earnings.
Priced against its rivals
None of the listed rivals above sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
The bet: what it pays if it works
The bet is on Hasbro's own video games, Exodus and Warlock, both due in 2027. If both sell a few million copies, they add only a little to today's value, because the rest of Hasbro already accounts for most of the price.
If both flop, Hasbro writes off what they cost and shareholders keep Magic, the licences and the toys, worth most of today's value.
| Owned video games (Exodus and Warlock) revenue in two to three years | Copies sold needed | At the stated multiple |
|---|---|---|
| $100.00M | about 2.0M at 70% kept | 0.9× |
| $250.00M (the big win) | about 5.1M at 70% kept | 0.9× |
| $450.00M | about 9.2M at 70% kept | 0.9× |
To pay 2× (a Fair bet) it would need about $9.31B of Owned video games (Exodus and Warlock) revenue (about 190.0M copies sold at 70% kept); to pay 5× (a Cheap bet), about $34.11B of Owned video games (Exodus and Warlock) revenue (about 696.2M copies sold at 70% kept), at the same multiple.
Each row is Owned video games (Exodus and Warlock) alone, plus the rest of the company (Magic, licensing and toys) counted at about $14.45B.
The steps it has to take
- Done Exodus launch date set for 7 April 2027
- Done Titles beyond 2027 cancelled and the portfolio narrowed to two
- Not started Exodus released on PlayStation, Xbox and PC due 2027-04
- Not started Warlock released due 2027-12
- Not started Hasbro discloses sales or amortization for the games due 2027-08
- Not started Digital development cost down 20% to 25% from 2026's peak due 2028-12
The detail behind the label
The evidence under this - 5 claims
Titles beyond 2027 were cancelled in Q2 (C22), and neither game has a price or sales target.
Neither game has a price yet (C23), and launch discounts and bundles would lower the figure.
Where we disagree with the market
Magic has stepped up for good, so the shares are a fairly priced grower: most analysts rate them a buy.
Part of Magic's jump is a boom in trading cards; the price pays for the new level and nothing for a fall.
Analysts see the record quarters and beats; but the trading-card boom grew faster than Magic did, and management itself expects Magic's growth to fall to single digits next year.
The case against us is real: Hasbro has beaten forecasts eight quarters running, more players and shops stand behind Magic than two years ago, and on its own history the shares are not dear.
What analysts say, and the evidence
The evidence under this - 6 claims
The six-year median P/E is 26 (C30), so on its own history the shares look cheap, though that median was struck on years of depressed earnings.
Circana measures US retail sales of a broad category while Hasbro reports worldwide wholesale Magic revenue, so the two rates are not strictly comparable.
Management also said Magic would have grown 8% to 10% in Q4 without the shift, and that all six 2027 sets carry a full product suite.
Circana also named affordability, tariffs and price increases as risks for the holiday season.
What could go wrong, and how we would know
The risks
- One game carries the company. About nine-tenths of operating profit comes from Wizards, mostly Magic, so a weaker Magic year hits profit hard.
- The boom could fade. Trading cards are the fastest-growing toy category; if collectors cool, Magic's sales could fall back as they did after the 2022 worries.
- Printing too much. In 2022 an analyst said Hasbro flooded the market with cards, and the shares fell 8.8% in a day.
- Video games are untested. $385.6M of game costs sat on the balance sheet at end-2025; if the games flop, much of it is written off.
- No head of Wizards. The president of the business earning most of the profit left in September with no successor named.
- Two retailers, and tariffs. Amazon and Walmart take a fifth of sales, and toys are made in Asia under tariffs that keep changing.
The evidence under this - 7 claims
Corporate costs sit outside the segments, and the $55M of tariff refunds lifted Consumer Products more than Wizards.
Circana measures US retail sales of a broad category while Hasbro reports worldwide wholesale Magic revenue, so the two rates are not strictly comparable.
What we still do not know
- How much of Magic's growth was shops filling shelves rather than players buying: nobody publishes sales to players by game.
- Magic's share of trading-card spending against Pokémon, One Piece and Lorcana.
- What the two games will cost to buy, and how many copies Hasbro needs to sell to earn back their cost.
The evidence under this - 3 claims
Circana measures US retail sales of a broad category while Hasbro reports worldwide wholesale Magic revenue, so the two rates are not strictly comparable.
ICv2 says part of the growth was retailers restocking after holding thin inventories into the 2025 holiday, which flatters sell-in.
Titles beyond 2027 were cancelled in Q2 (C22), and neither game has a price or sales target.
What would change our view
- Neutral→AttractiveA cheaper price on this year's earnings
It needs:
- ○The shares cost 13 times this year's expected profit, down from about 17.about $88.09 today, 25% below the last close
- Neutral→AttractiveMagic shows a plateau, not a peak
It needs all of:
- ○Magic's fourth-quarter 2026 sales fall no more than mid single digits.checked at the next results, due by 9 Feb
- ○Hasbro forecasts Wizards' 2027 sales to grow at least mid single digits.watched as it happens
- Neutral→UnattractiveThe boom turns
It needs any of:
- ○Magic's sales fall more than 10% from a year earlier in any quarter of 2027.checked at the next results, due by 9 Feb
- ○Hasbro forecasts Wizards' 2027 sales to fall.watched as it happens
We would also be wrong if
- Fewer shops in Magic's play network, or fewer players at its events.
- Exodus or Warlock slipping out of 2027, or more game costs written off.
- The toy business losing money for a whole year again.
What is coming
- 9 February 2027 Fourth-quarter and full-year 2026 results: Whether Magic's fourth quarter fell only as guided, and the 2027 outlook for Wizards and the games.
Every dated event ahead
- 9 February 2027 Fourth-quarter and full-year 2026 results: Whether Magic's fourth quarter fell only as guided, and the 2027 outlook for Wizards and the games.
- 7 April 2027 Exodus release: The first owned game in years, and whether its sales can earn back the capitalized cost.
- 30 April 2027 First-quarter 2027 results: Magic's first quarter against a record 2026 base, with six tentpole sets planned.
Since we wrote this
- 23 OctThesis writtenNeutral, medium convictionWritten three days after a record Magic quarter sent the shares up 11%, and before the Q3 10-Q.
Sources 16
Sources - 16
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-02-25the segments, Magic's 2025 growth, customers, seasonality, competition, capitalized game cost, debt, tariffs and the executive officersbacksC01C02C03C16C17C20C21C26C38C39C41C43
- S02primarycompany release2026-10-20the quarter and nine months by segment, Magic revenue, licensing, guidance, the balance sheet, cash flow and the buyback targetbacksC04C05C06C07C13C18C25C27C28C39C40C46
- S03primarytranscript2026-10-20Hasbro Q3 2026 earnings call transcript (FMP), held 20 October 2026Magic's pull-forward and outlook, organized play, stores, the games' dates and cost path, licensing and tariffs
I think trading cards, you know, over the last year have emerged as the number 1 category in toys and games. I think they are actually bigger than building blocks now.
backsC07C08C09C14C19C23C24C28C44 - S04primarycompany filing2026-07-30the game write-off, Consumer Products' first-half loss, the new notes, the buyback authorization, the cyber incident and the share countbacksC22C26C29C40C42
- S05secondaryindustry data2026-08-12US toy sales in the first half of 2026 by category and buyer age
Eight of the 11 toy “super categories” tracked by Circana posted dollar growth through June, led by a 58% increase in products in the explorative and other toys category and a 45% increase in the games and puzzles category. This growth was fueled primarily by trading cards, collectibles, and sports-themed merchandise.
backsC10C13 - S06secondaryindustry data2026-01-27global toy sales in 2025, the fastest categories, collectibles and the top properties
The games & puzzles category grew the fastest (up 30 percent), while building sets grew for the sixth consecutive year (up 18 percent).
backsC11 - S07primaryindustry data2026-04-03the size and growth of the North American hobby games market and trading cards' share
The hobby games market grew 40% to $3.66 billion in 2025 according to ICv2 estimates, with strong consumer demand overcoming the impacts of major disruptions, including tariffs and a distributor bankruptcy.
backsC12 - S08primarycompany filing2026-02-23Hasbro, LEGO, The Pokémon Company and Spin Master named as large toy competitorsbacksC15
- S09primaryvendor data2026-10-22Research pack for HAS (FMP market tier, FINRA short interest), fetched 23 October 2026the 22 October close, returns and the move split, multiples and their history, analyst ratings and estimates, earnings surprises and short interestbacksC30C31C32C33C36
- S10primarycompany filing2026-10-23open-market sales, the 10b5-1 flag and option exercisesbacksC34
- S11primarycompany filing2026-04-17ownership, the chief executive's pay, the bonus and share-award measures, and ownership guidelinesbacksC35C41
- S12secondarynews2022-11-14the 2022 downgrade over Magic's distribution and the day's fall
Shares of Hasbro were down 8.8% as of 12:52 p.m. ET on Monday after Bank of America analyst Jason Haas downgraded the stock to underperform.
backsC37 - S13primarycompany filing2026-10-23revenue, costs and cash flow for 2020 to 2025 and the trailing yearread, but no claim rests on it
- S14primarycompany release2026-02-102025 adjusted EBITDA and earnings per share and the first 2026 outlookbacksC46
- S15primarycompany release2026-07-21the first raise of the 2026 outlook and Magic's first $500M quarterbacksC46
- S16primarycompany filing2026-07-27the Wizards president stepping down on 1 September 2026 and advising until September 2027backsC45