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Turtle Beach (HEAR) to Report Q1 Earnings: What's in Store?

Zacks Equity Research

Turtle Beach Corporation HEAR is scheduled to report first-quarter 2019 financial results on May 8, after the closing bell. In the last-reported quarter, the company delivered a positive earnings surprise of 1.5%.

The audio technology company is poised to benefit from solid product performance, excellent market position along with market share expansion, driven by innovation, quality products, strong brand and retail partnerships.

Let’s find out how things are shaping up prior to the announcement —

Factors at Play

During the first quarter, Turtle Beach claimed that it has sold more than 30 million gaming headsets, since entering the market in 2005. Its state-of-the-art lineup of quality gaming headsets for Xbox One, PlayStation4, Nintendo Switch, PC and mobile devices has amplified its efforts to achieve this unique feat in North America.

The company’s Stealth 600 for Xbox One and PlayStation4 continues to lead the pack as North America’s best-selling wireless gaming headset. Turtle Beach unveiled Recon 70 gaming headset with powerful audio and microphone to replace its iconic Recon 50, which was the best-selling product in its category in North America for the past two years. Reportedly, Recon 70 works with all the leading brands and is available in both black and white options for Xbox One and PlayStation4, and in red accented version for Nintendo.

Turtle Beach anticipates the momentum in the battle royale genre to drive growth in the headset market. The company expects industry demand for headsets to remain strong on the back of its market-leading share, the frequency of headset replacements, success of its efforts to grow the PC accessories business, and pace of geographic expansion.

Nonetheless, it sees the overall headset market to contract moderately as we move through 2019, with the number of new gaming headset users returning to a normal rate.

What Our Model Says

Our proven model does not conclusively show that Turtle Beach is likely to beat earnings this quarter as it does not possess any of the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Earnings ESP: Turtle Beach’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -10.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Turtle Beach Corporation Price and EPS Surprise

Turtle Beach Corporation Price and EPS Surprise

Turtle Beach Corporation price-eps-surprise | Turtle Beach Corporation Quote

Zacks Rank: Turtle Beach currently has a Zacks Rank #5 (Strong Sell).

Note that we caution against stocks with a Zacks Rank #4 (Sell) or #5 going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Lululemon Athletica Inc. LULU with an Earnings ESP of +0.51% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Repligen Corp. RGEN with an Earnings ESP of +22.64% and a Zacks Rank #2.

Agilent Technologies, Inc. A with an Earnings ESP of +2.10% and a Zacks Rank #2.

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Turtle Beach Corporation (HEAR) : Free Stock Analysis Report
Repligen Corporation (RGEN) : Free Stock Analysis Report
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