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Is Turtle Beach (HEAR) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Turtle Beach (HEAR). HEAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors will also notice that HEAR has a PEG ratio of 0.93. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HEAR's industry currently sports an average PEG of 2.26. Over the last 12 months, HEAR's PEG has been as high as 1.36 and as low as 0.83, with a median of 1.04.

Investors should also recognize that HEAR has a P/B ratio of 1.89. 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. Within the past 52 weeks, HEAR's P/B has been as high as 4.23 and as low as 0.97, with a median of 3.05.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HEAR has a P/S ratio of 0.52. This compares to its industry's average P/S of 1.3.

Finally, investors will want to recognize that HEAR has a P/CF ratio of 5.57. 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 P/CF compares to its industry's average P/CF of 9.02. Over the past year, HEAR's P/CF has been as high as 6.43 and as low as 2.79, with a median of 4.10.

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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