Market Overview

What Is Turtle Beach? Oppenheimer Thinks It Could Triple

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  • Turtle Beach Corp (NASDAQ: HEAR) is a micro-cap audio technology company that sells products under the Turtle Beach and HyperSound brands. Gamers might be familiar with their headsets.
  • On Thursday, Oppenheimer initiated coverage of the stock with an Outperform rating and $6.00 price target.
  • Shares of Turtle Beach were up roughly 1 percent on Thursday.

Oppenheimer analysts Sean McGowan and Christopher Barnes see Turtle Beach as “an attractive way to play two investment ideas:"

1) The revival of console video games and simultaneous surge in multiplayer online games sales.

2) The emergence of the HyperSound “directed audio” technology, currently on the verge of commercialization.

Given this backdrop, the experts see robust growth in 2016 and beyond as momentum in the transition to the “next” generation of PlayStation and Xbox games increases, and as the first consumer products featuring the HyperSound technology are shipped.

A Closer Look

For a few years now, Turtle Beach has been the headset of choice among hardcore video game players. Now that the “crossover point” between the previous generation and the next generation of consoles seems behind us, the analysts expect headset sales to show net growth – in the years to come.

In addition, HyperSound products will finally hit the market in a few weeks. Many believe this should work as a catalyst for the stock.

In this context, Oppenheimer envisions hasty growth in sales, profits and cash flow. They expect the company “to show revenue growth in 2016 of over 30%, the combination of strong headset growth and the first full year of HyperSound revenue.” They model 2016 EPS of roughly $0.15, surging to $0.60 by 2018.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Latest Ratings for HEAR

DateFirmActionFromTo
Sep 2020StifelInitiates Coverage OnBuy
Apr 2020WedbushDowngradesOutperformNeutral
Mar 2019WedbushMaintainsOutperformOutperform

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