Turtle Beach (HEAR) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Turtle Beach (HEAR) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Turtle Beach Fundamentals
Stock Price Target: $40.86
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Turtle Beach in comparison to the Consumer Electronics industry and the S&P 500.
Turtle Beach is a Small Cap company with a Market Cap of $358.7M.
How are investors using Turtle Beach earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Turtle Beach is 17.98%, in comparison to 3.37% for the S&P 500 and 1.48% for the 10-year treasury bond. The median earnings yield for the Consumer Electronics industry is 2.19%.
What does Turtle Beach Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Turtle Beach is currently trading at a P/E of 13.17. The P/E for the Consumer Electronics industry is 27.83 and the P/E for the S&P 500 is 29.68.
What is the current Price-to-Sales Ratio (P/S) for Turtle Beach?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Turtle Beach is currently trading at a P/S of 0.98. The P/S for the Consumer Electronics industry is 1.36 and the P/S for the S&P 500 is 3.22.
How does Turtle Beach Price-to-BookRatio (P/B) compare to the Consumer Electronics industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Turtle Beach P/B ratio is 2.89. The P/B for the Consumer Electronics industry is 4.26 and the P/B for the S&P 500 is 4.86.
How attractive is Turtle Beach Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Turtle Beach ROIC is currently 24.44% in comparison to 48.15% for the Consumer Electronics industry and 8.60% for the S&P 500.
What is Turtle Beach YTD Performance in comparison to its industry and the total market?
The year-to-date (YTD) performance is the amount of profit/loss realized by a stock since the first trading day of the current calendar year.
The YTD performance for Turtle Beach is 14.62%. The Consumer Electronics industry has a YTD performance of 35.24% in comparison to the YTD S&P 500 performance of 25.87%.
Recent Financial Results (Q3, 2021)
- Q3 net revenue of $85.3M vs. $112.5M (record 141% growth in Q3 2020)
- Q3 net income of $2.6M vs. $17.8M in same quarter of 2020
- Adjusted EBITDA of $6.7M vs. $27.6M in previous years quarter
- Cash Balance grew to $28.1M vs. $27.3M in previous years quarter
- No short or long-term debt on the balance sheet
- On track to deliver on revenue guidance of $365M – $380M YoY
Stock Price Target: $40.86
Turtle Beach is as an audio technology company that develops, commercializes, and markets gaming headset solutions for various platforms, including video game and entertainment consoles, handheld consoles and personal computers, under the Turtle Beach brand. The company also offers gaming headsets, keyboards, mice, and other accessories for the personal computer peripherals market under the brand of ROCCAT.
The company serves retailers, distributors, and other customers in North America, the United Kingdom, Europe, and internationally. Turtle Beach was founded in 1975 and is based in White Plains, New York. The current CEO is Juergen Stark.
This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.