After months of lackluster performance, Hasbro (NASDAQ:HAS) is finally showing signs of life again following its Q2 2021 earnings update. Total revenue skyrocketed 54% higher than a year ago to $1.32 billion, handily beating many Wall Street analysts' expectations.

But for shareholders following the development of the leading toy maker since its big acquisition of Entertainment One (eOne) right before the pandemic, this comes as less of a surprise. Hasbro is only just beginning to unlock the value of the TV and movie streaming industry. 

A big rebound in entertainment revenue

In spite of the effects of the pandemic, Hasbro had a decent enough showing in 2020. Strong gaming and toy sales helped partially offset weakness elsewhere, including big double-digit declines in its newly formed TV and filmed entertainment segment created by the eOne takeover. 

Two pairs of feet in front of a TV.

Image source: Getty Images.

Management has been maintaining that a return to TV and film production would be manifest during the second half of 2021, and that promised rally started to become apparent during the second quarter. Hasbro's wholly owned toy franchises and toy production from licensing partners (most notably Disney, which taps Hasbro for its Star Wars and Marvel brands) carried the day in Q2. But entertainment notched a solid jump as well, lapping the effects of the initial economic lockdowns last spring.

Hasbro Segment

Q2 2021 Revenue

YoY % Change

Franchise brands

$650 million

72%

Partner brands

$212 million

53%

Hasbro gaming

$147 million

7%

Emerging brands

$117 million

54%

TV/film/entertainment

$197 million

48%

Data source: Hasbro.

Hasbro CEO Brian Goldner said on the earnings call that TV led the way higher for the entertainment segment with eOne back in production mode. The channels Freeform and ABC (both parts of Disney) helped generate some revenue, but there were other big network deals as well. Goldner explained:

In television, Cruel Summer premiered to very high ratings on Freeform and was picked up by the network for a second season. ABC renewed The Rookie for a fourth season, and we have commenced production. Apple TV+ bought worldwide rights to our production of Come From Away which is in post-production for release this fall. Additional film releases to come include Clifford the Big Red Dog with Paramount and Stillwater, directed by Tom McCarthy and starring Matt Damon. In unscripted TV, our slate remains robust with close to 40 active productions for Canada, the U.S. and U.K.

Other noteworthy productions worked on in the period include the recently released Snake Eyes: G.I. Joe Origins that Hasbro licensed to Paramount (part of CBS Corporation). My Little Pony: A New Generation is also nearing its September debut on Netflix, and work on the Magic: The Gathering TV show for Netflix -- slated for a 2022 release -- is also ongoing.

An alternative bet on the streaming industry

Hasbro and its large stable of toy and game brands could be a treasure trove of TV and film content in the next few years. In fact, Goldner said the eOne team is working on more than 200 productions right now, and over 30 of those are based on Hasbro's brands. The studio's partnership with all of the top streaming TV platforms positions it nicely to benefit from the rapid migration to internet-based at-home entertainment, and the stock could be a way to bet on the whole movement without picking which streaming platform will be the biggest winner

After the Q2 report and big rebound across the board -- thanks in no small part to Disney, Netflix, and the other streamers -- Hasbro stock trades for just 14 times trailing 12-month free cash flow. If it can generate some growth from eOne and the new era of digital TV that is just beginning, this could be one incredibly cheap stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.