Kermit the Frog sings about how hard it is to be green. Poor LeapFrog Enterprises (NYSE:LF) can't get its hands on anything green these days. Yesterday, the maker of educational toys warned that it would produce a wider loss than expected in its first quarter.

You can't say we didn't warn you.

Last month, we took the company to task for its recent wave of underperformance. "The company had missed its third-quarter targets and explained it away as a timing issue," we wrote. But last night the company also narrowly missed its fourth-quarter mark. Yes, it is a timing issue. LeapFrog is running out of time.

After its momentum-fueled run early on, this LeapFrog lost its legs. With the stock dipping to the high teens in after-hours trading yesterday, the toy maker's shares have been shredded by more than 60% over the last five painful months.

Of course, not all toy stocks are struggling. Hasbro (NYSE:HAS) has been a solid recommendation of both Motley Fool Stock Advisor and Hidden Gems in the past year or so. But while companies like Hasbro and Mattel (NYSE:MAT) benefit from diversified portfolios, LeapFrog is heavily concentrated in electronic learning toys.

That's not necessarily a bad thing. However, in LeapFrog's case, initial success brought on the imitators. Even Mattel is looking to pry its way into LeapFrog's stronghold.

True, we're only talking about the March quarter here, and toy companies make their livings in the second half of the year. This is obviously a seasonal business. Still, it's not so much the loss that is troublesome; the market was already expecting that. And while the $0.18 to $0.22 a share deficit is below even what the market expected, the real rub is how the company got there.

Lower gross margins -- a trend that reared its ugly head late last year and continues to fester -- really hurt. So does the fact that the company told investors that 10% of the $800 million to $850 million it was looking to post in sales this year would come in the first quarter. That implies a top-line target of at least $80 million. LeapFrog is now lowering that to a range between $66 million and $72 million. Clearly, if this slow start persists into the critical holiday selling season, LeapFrog's shortcomings will be magnified.

After all that's happened, the stock may finally look cheap based on last year's earnings of $1.20 a share. Still, it wouldn't hurt to hit your local Toys "R" Us (NYSE:TOY) or Wal-Mart (NYSE:WMT) and find out why LeapFrog's products aren't selling as briskly as the company thought they would barely a month ago. This frog needs to be dissected before value hunters take the leap.

Are LeapFrog products good for kids or are traditional toys better? What are the ideal child development playthings? All this and more -- in the Parents and Expecting Parents discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz never mastered the game of leapfrog but he'd beat you silly if the game was hopscotch. He does not own shares in any company in this story.