JAKKS Pacific (NASDAQ:JAKK) doesn't mind when its customers play games, but it would prefer that its shareholders didn't. Despite the release of a solid second-quarter report yesterday, the toy maker saw its stock slide by 7%.

Sales for the quarter rose by 16% to hit $127.1 million, while earnings per share soared 77% higher to $0.39. A toy company producing that kind of profitability at the polar opposite of the critical holiday shopping season is commendable. In fact, earlier this week, Hasbro (NYSE:HAS) and Mattel (NYSE:MAT) produced second-quarter reports that revealed earnings of just $0.13 and $0.05 per share, respectively. With all three stocks trading at similar prices, it's hard not to approach JAKKS as a value play.

The stock got roughed up yesterday because the company missed Wall Street's top-line growth targets. Analysts were looking for sales to grow by a more robust 27%. However, the company still nailed the bottom-line projection. That's why I believe the market's foul mood was overdone. It's easy to worry about fickle toy trends or the impact of higher raw-material prices caused by soaring fuel costs. That's understandable. But if JAKKS was able to miss on the top and match on the bottom, that means the company's margins came in far better than Wall Street had expected.

That's not too shabby.

JAKKS is sticking to its 2005 guidance, calling for earnings to come in at $2.28 a share on $660 million in revenues. That prices the stock at just eight times earnings. Is that a fair price for a company producing double-digit net margins and double-digit profit growth? It's more than fair. In fact, it's dirt cheap. Even if Wall Street's 2006 targets prove true and earnings take a small dip next year, it would still price the shares at a lower earnings multiple than Hasbro's and Mattel's, and far less than those of the struggling toysmiths at LeapFrog (NYSE:LF).

So I guess that old nursery jingle is only partly true. Yes, Jack fell down. But he did not break his crown.

Will investors come tumbling after?

Mattel was singled out last year as a Motley Fool Inside Value stock recommendation, while Hasbro is a Motley Fool Stock Advisor recommendation.

Longtime Fool contributor Rick Munarriz thinks that you're never too old to play games -- or to butcher perfectly good nursery school tunes. He does not own shares in any of the companies in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.