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Here's Why Turtle Beach is a Promising Pick for Investors

Zacks Equity Research
·4 min read

Shares of Turtle Beach Corporation HEAR have soared 165.3% in the past six months compared with 17.4% growth of the industry. Currently, the stock carries a Zacks Rank #2 (Buy) and has a VGM Score of A.



The San Diego, CA-based audio technology company delivered a trailing four-quarter positive earnings surprise of 41%, on average. The Zacks Consensus Estimate for its current-year earnings has been revised 52.7% upward over the past 60 days.

What Works for Turtle Beach?

Turtle Beach is a leading gaming audio and accessory brand that offers a wide range of gaming headsets. In 2019, the company acquired ROCCAT, a German PC peripherals maker. ROCCAT’s expertise aided Turtle Beach’s expansion into the $1.6-billion PC gaming headset market as well as the $1.3-billion PC gaming keyboard and mouse market. The German company’s enhanced distribution channels across North America, Europe and Asia enabled Turtle Beach to offer its lineup of products to more gamers around the world.

A few days ago, ROCCAT unveiled its Titan Optical Switch and three variants of its Vulcan keyboard series. Its new Pro models with Titan Optical Switches offer PC gamers a keyboard 40 times faster than classic mechanical switches. ROCCAT also introduced the Elo series PC gaming headsets as the first products in its lineup of precision PC gaming equipment.

Turtle Beach’s bestselling Recon 70 series wired headsets, together with the recently introduced Stealth 700 Gen 2 and Stealth 600 Gen 2 wireless gaming headsets, are likely to allow it to retain its leading position. The company’s new Stealth 700 Gen 2 and Stealth 600 Gen 2 are the first cross-generation console headsets designed to work with Xbox One and Xbox Series X as well as PlayStation 4 and PlayStation 5.

Moreover, Turtle Beach’s headsets are suited for learning and working remotely via video or audio conferencing, resulting from the COVID-19 situation. The combination of increased gaming activity, distance learning and work-from-home trends should continue to drive higher demand for headsets. The company’s ability to significantly increase its production and delivery capacity along with gain in market share is impressive.

Turtle Beach is well positioned to benefit from a solid product performance combined with market share gains, backed by innovation, quality products, strong brand and retail partnerships. It has several growth drivers in place and enjoys a strong foothold in its served markets. So, it is rational to believe that it has more upside left.

Other Key Choices

Some other top-ranked stocks in the industry are Corning Incorporated GLW, Vocera Communications, Inc. VCRA and Acacia Communications, Inc. ACIA, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Corning delivered a trailing four-quarter positive earnings surprise of 39.9%, on average.

Vocera delivered a trailing four-quarter positive earnings surprise of 70%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

Acacia pulled off a trailing four-quarter positive earnings surprise of 17%, on average. The company’s earnings topped the consensus estimate in three of the last four quarters.

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Corning Incorporated (GLW) : Free Stock Analysis Report
 
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