Are Investors Undervaluing Turtle Beach (HEAR) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Turtle Beach (HEAR). HEAR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Investors should also note that HEAR holds a PEG ratio of 0.93. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HEAR's PEG compares to its industry's average PEG of 2.25. Within the past year, HEAR's PEG has been as high as 1.25 and as low as 0.83, with a median of 1.03.
Another valuation metric that we should highlight is HEAR's P/B ratio of 2.63. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.16. Over the past year, HEAR's P/B has been as high as 4.23 and as low as 0.97, with a median of 2.98.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HEAR has a P/S ratio of 0.61. This compares to its industry's average P/S of 1.39.
Finally, we should also recognize that HEAR has a P/CF ratio of 7.76. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. HEAR's current P/CF looks attractive when compared to its industry's average P/CF of 9.02. HEAR's P/CF has been as high as 7.76 and as low as 2.79, with a median of 4.33, all within the past year.
These are only a few of the key metrics included in Turtle Beach's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HEAR looks like an impressive value stock at the moment.
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