Wedbush: Turtle Beach Continues To Benefit From Rise Of Battle Royale Gaming
Turtle Beach Corp. (NASDAQ: HEAR) has seen substantial market growth and market share gains, while improved operations have bolstered earnings, according to Wedbush.
The Analyst
Analyst Michael Pachter reiterated an Outperform rating on Turtle Beach with a $42 price target.
The Thesis
Turtle Beach raised its third-quarter revenue guidance from $65 million to a range of $73 to $74 million and lifted its projected earnings per share from 44 cents to 74 cents, Pachter said in the upgrade note. (See his track record here.)
The headset and sound card manufacturer has continued to benefit from battle royale-style gaming, as the use of headsets improves the gaming experience, the analyst said.
“Additionally, we think Turtle Beach headsets are ideal for holiday gift-giving for 'Fornite' players, as well as replacing/upgrading around major October game launches from 'Call of Duty' and 'Red Dead Redemption,' and 'Battlefield V' in November. In our view, this positions Turtle Beach to surpass its previously implied Q4 guidance.”
Turtle Beach has over 45 percent market share in the $1-billion global gaming headset market, according to company data, and Pachter said he expects another 5-percent market share gain in 2019.
“While management is currently focused on entering into the PC gaming headset market in North America and Europe, then later expanding into China, there is also the opportunity of entering the gaming keyboards and mice markets.”
These are likely moves over the next two years as Turtle Beach pays off its remaining debt and has cash to spend, the analyst said.
Price Action
Turtle Beach shares were rallying 15.91 percent to $20.88 at the time of publication Friday.
Related Links:
DA Davidson: Turtle Beach Winning On Secular Shift In Gaming Trends
Turtle Beach CEO Talks 'Fortnite,' Battle Royale Gaming: 'It's A Great Place To Be'
"Fortnite" screenshot courtesy of Epic Games.
Latest Ratings for HEAR
Aug 2018 | Oppenheimer | Maintains | Outperform | Outperform |
Aug 2018 | Wedbush | Maintains | Outperform | Outperform |
Jul 2018 | DA Davidson | Initiates Coverage On | Buy |
View More Analyst Ratings for HEAR
View the Latest Analyst Ratings
See more from Benzinga
© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
