Does Turtle Beach Have Discount Potential or Is It a Falling Knife?
Shares of gaming headset maker Turtle Beach (NASDAQ: HEAR) recently plunged to a 52-week low after the company released its preliminary fourth-quarter numbers. It expects its revenue to fall 8%-10% annually for the quarter, and decline 18%-19% for the full year. Analysts had expected its revenue to decline 4% for the quarter and 17% for the year.
On the bottom line, Turtle Beach expects its EPS to decline 44%-52% for the quarter and 82%-85% for the full year. Both estimates were in-line with analysts' expectations, but those numbers are ugly, and the fact that the company met earnings expectations while missing revenue estimates suggests that it's cutting costs to boost its earnings.
However, CEO Juergen Stark noted that Turtle Beach faced tough year-over-year comparisons due to "an extraordinary surge" in headset sales in 2018 and that its revenue declines in 2019 were "anticipated." But looking ahead, Stark expects its sales to accelerate again as Microsoft (NASDAQ: MSFT) and Sony (NYSE: SNE) launch new consoles later this year, and he predicts that the gaming headset industry would "return to growth in 2021."
Image source: Turtle Beach.
Source Fool.com
