Parametric (PAMT) expects its Turtle Beach gaming headset unit (officially on the books as of Jan. 15) to post 2014 revenue of $210M-$230M, up 24% Y/Y at the midpoint. Sales of HyperSound hearing aids (just received FDA approval) are expected to be in a range of $1M-$4M; bigger sales are forecast for 2015.
Q1 sales are expected to be up 10% Y/Y. 2014 gross margin is expected to come in at 30% (+150 bps Y/Y), and adjusted EBITDA in a range of $20M-$25M.
Parametric plans to change its name to Turtle Beach in May, and its ticker to HEAR.
Parametric argues HyperSound's use of ultrasonic frequencies and a proprietary emitter allows it to direct sound towards an individual listener who isn't wearing headphones, as well as produce 3D effects.
The company has also claimed HyperSound can enable hearing aids superior to traditional solutions that "provide too much amplification in the lower frequencies and too little in the needed higher frequencies."
H-P (HPQ +3.7%) and Teradata (TDC +1.8%) have been started at Overweight by Atlantic Securities.
BlackBerry (BBRY -6.2%) has been cut to Underperform by Oppenheimer following a major rally over the last four weeks. RBC upgraded shares last Friday.
F5 (FFIV +3.7%) has been upgraded to Outperform by William Blair.
Qihoo (QIHU +4.3%) has been upgraded to Buy by Stifel, and started at Buy by UBS. Shares fell last Thursday following a report questioning the size of the company's search share gains, and rose the day before thanks to an Alibaba investment rumor.
SA contributor Alpha Exposure argues gaming headset maker Turtle Beach, which Parametric (PAMT -2.8%) is set to conduct an 80/20 reverse merger with, is "a deteriorating (and quite possibly distressed) company" merging with Parametric "out of desperation."
The author points out Turtle Beach went from posting a $4.1M profit in 1H12 to a $5.6M loss in 1H13; the console cycle is blamed. Also, Turtle Beach guided in August for 2013 EBITDA of $32M-$40M, below a 2012 level of $47.8M, and recently stated it plans a further revision on account of a delay in releasing an adapter and software needed to make its headsets "fully functional" with the Xbox One.
AE also points out Parametric execs will receive "special golden parachute payments" once the merger is concluded, and that the company apparently made failed attempts to sell itself before agreeing to the deal.
Its target price for Parametric is $3.94, 75% below current levels.
Parametric (PAMT -6%) slumps after announcing it's not pursuing a PIPE financing deal as part of its evaluation of strategic options. The audio tech developer adds it has received "substantial licensing proposals" for its HyperSound tech, and has been "approached by several industry leaders in key target verticals to pursue strategic discussions." The announcement comes 2 weeks after Parametric disclosed it had hired boutique i-bank Houlihan Lokey. (PR)
Parametric Sound (PAMT +18.3%) hires M&A-focused investment bank Houlihan Lokey to assess "strategic options." Chairman Ken Potashner says the company has been approached by several industry leaders in key target markets about "opportunities" but didn't identify the options under consideration.