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Oppenheimer Sees Near 100% Upside At Skullcandy

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Oppenheimer Sees Near 100% Upside At Skullcandy

Oppenheimer began coverage on Skullcandy Inc (NASDAQ: SKUL) with an Outperform rating on Wednesday, seeing near 100 percent upside. A 12-to 18-month price target of $8 was set on shares.

The stock closed at $4.78 on Tuesday.

Sean McGowan commented, "We are initiating coverage of Skullcandy (SKUL) with an Outperform rating and a 12- to 18-month price target of $8. Sales and profits in 2015 have been negatively affected by adverse currency moves, as well as by changes to its international distribution model."

Additionally, McGowan noted that retail promotional activity in the headphone category has been intense this holiday season. "We believe these factors are overshadowing very strong constant currency sales growth and market share gains. These factors may continue to weigh on the shares into 2016, but we expect that by this time next year," he said.

"SKUL's results will show better momentum. We expect the stock to trade up to at least $8 12-18 months from now, and believe it will Outperform the broader markets."

The company was founded in 2003 by Rick Alden, and focuses on audio products (music/media headsets and headphones, Bluetooth speakers and video game headsets) for music consumers and hard core video gamers.

Skullcandy's last IPO was in July 2011 at $20 per share; the stock has not seen that price since.

Sales of Skullcandy reached nearly $300 million in 2012. In 2013, the significant setbacks were experienced, with its sales dropping 29 percent. Shares are now below their 2013-era closing low of $5.11.

Latest Ratings for SKUL

DateFirmActionFromTo
Jun 2016DA DavidsonDowngradesBuyNeutral
Jan 2016OppenheimerMaintainsOutperform
Dec 2015OppenheimerInitiates Coverage onOutperform

View More Analyst Ratings for SKUL
View the Latest Analyst Ratings

 

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