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Turtle Beach Corporation: Why You Should Add This Stock To Your Watch List
- This entity was formed in January 2014 after merging with Parametric Sound Corporation.
- Management goal is to reach $1B in revenues by 2018, fundamental analysis show that it is an ambitious but realistic goal.
- The balance sheet isn't strong. The company is tight on working capital.
- Time to look beyond the reverse merger and weakness related to the gaming consoles product transition issues.
- Growth of PlayStation 4 and Xbox One should drive sales of gaming headsets, the market in which the company enjoys a leading position.
- Stock may gain 30-40% as revenue growth returns and improving margins help the earnings.
Tue, Nov. 11, 5:38 PM
Tue, Nov. 11, 12:45 PM
Tue, Nov. 11, 10:54 AM
- Turtle Beach (NASDAQ:HEAR) has plunged to new 52-week lows after missing Q3 revenue estimates and providing weak Q4 guidance. Northland Securities has downgraded to Market Perform, and cut its target to $5.75. Shares fell as low as $3.14 before bouncing a bit.
- On the CC (transcript), CEO Juergen Stark said Turtle Beach expects to grow headset revenue by "at least 10%" in 2015; the company's revised 2014 forecast implies just 6% growth at the midpoint. Headset gross margin is expected to be in a low-30s range (up from Q3's 23.3%).
- At the same time, Stark admitted console headset attach rates have been "a few points" below Turtle Beach's expectations for both the Xbox and PlayStation. NPD estimates U.S. gaming headset sales have fallen 1.4% Y/Y in 2014 through Q3, thanks to lower attach rates and Microsoft's release of an adapter that allows older headsets to work with the Xbox One.
- Q3 results, guidance/details
Mon, Nov. 10, 5:13 PM
- In addition to missing Q3 estimates, Turtle Beach (NASDAQ:HEAR) is guiding for headset division revenue in seasonally huge Q4 to be in a range of $91M-$101M. The company's Q4 revenue consensus is at $118.3M.
- Full-year headset revenue guidance has been slashed to $185M-$195M (6% growth at the midpoint) from $210M-$230M. Company-wide Adjusted EBITDA guidance has been cut to $8M-$10M from $20M-$25M.
- The company states "timing differences in product launches and international orders versus 2013" hurt Q3 sales, and expects Q4 sales to be hurt by "delays in the launch of several key video game titles from the fourth quarter into next year and the continued trend of somewhat lower [headset] attach rates."
- Gross margin rose 70 bps Y/Y in Q3 to 23.3% thanks to better headset and customer mix. Opex rose 26.1% to $15.1M due to "costs associated with being a public company," along with HyperSound investments.
- Shares unchanged AH for now. Q3 results, PR.
Mon, Nov. 10, 4:09 PM
Thu, Aug. 28, 5:49 PM
- Turtle Beach (NASDAQ:HEAR) co-founders Fred Romano and Carmine Bonanno have sold 371.5K shares to "a group of institutional investors."
- News of the sale comes with Turtle Beach trading close to its 52-week low of $6.54. Shares tumbled earlier in August after the gaming headset maker posted a Q2 miss, albeit while maintaining full-year guidance.
Tue, Aug. 12, 12:45 PM
Mon, Aug. 11, 5:47 PM
- In spite of its big Q2 revenue miss, Turtle Beach (NASDAQ:HEAR) is reiterating guidance for 2014 headset division revenue of $210M-$230M; the company's total revenue consensus is at $228.4M. Guidance for company-wide adjusted EBITDA of $20M-$25M is also reiterated.
- The company notes attach rates for its gaming headsets has "tracked below our expectations due primarily to the broad availability of the Xbox One Headset Chat Adapter and the limited number of multi-player video game launches for next-generation consoles."
- Turtle Beach is counting on recent headset launches, along with growth in the next-gen console base and upcoming multi-player games, to boost demand. It also claims to have made made "significant" cost and audio clarity improvements for its HyperSound hearing aid tech ahead of 2015 product launches.
- Gross margin fell to 21.7% from 25.8% a year ago; Turtle Beach blames non-recurring costs related to bundling Xbox One chat adapters. Opex grew 16% to $14M.
- HEAR -3.5% AH. Q2 results, PR
Mon, Aug. 11, 4:07 PM
Fri, Jul. 11, 12:43 PM
- Shareholders owning 72.4% of Turtle Beach's (HEAR) outstanding shares have agreed to extend lockup restrictions on selling them to April 1, 2015. The restrictions, tied to the Parametric/Turtle Beach reverse merger, were previously set to expire on July 16.
- The shareholders include top investor SG VTB Holdings, the co-founders of Turtle Beach's headset business, and the company's chairman and CEO.
- Shares were down 41% YTD prior to the announcement. 11% of the float was shorted as of June 30.
Mon, May. 12, 6:02 PM| Comment!
Tue, May. 6, 9:45 AM
- Wedbush's Michael Pachter has launched coverage on Parametric Sound (HEAR -0.6%) with an Outperform and $15 PT.
- Pachter predicts Parametric's Turtle Beach unit "will remain the dominant player in the gaming headset market," and expects its non-gaming brands to grow their share of the broader headset market thanks to TB's "differentiated technology and compelling value proposition."
- He also thinks Parametric's HyperSound tech (previous) could "generate significant revenue" via hearing aid and retail applications. Pachter's $15 PT assigns a $100M valuation to HyperSound, and values Turtle Beach at 12x 2015E EBITDA of $45M.
- Shares have turned negative after opening higher. They sold off yesterday in spite of a bullish Cowen coverage launch, and are close to a 52-week low of $8.55.
Fri, Apr. 25, 5:39 PM
Thu, Apr. 24, 12:46 PM
Thu, Apr. 24, 9:28 AM
Thu, Apr. 24, 9:08 AM| Comment!
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Turtle Beach Corp is an audio technology company. It develops audio products for consumer and commercial markets. It also designs & markets audio peripherals for video game consoles, personal computers and mobile devices under the brand Turtle Beach.
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