|
Related Topics
|
|
Category: Stock Market and Turtle Beach Corporation
Date: 11 March 2020 Stock Price: $29.98 We take a look at the 4th quarter earnings release of their 2019 fiscal year of Turtle Beach Corporation a leading gaming audio and accessory brand offering a wide selection of cutting-edge gaming headsets.
|
|
About Turtle Beach Corporation
Turtle Beach (www.turtlebeach.com) is a leading gaming audio and accessory brand, offering a wide selection of cutting-edge, award-winning gaming headsets. Whether you’re a professional esports athlete, hardcore gamer, casual player, or just starting out, Turtle Beach has the gaming headset to help you truly master your skills. Innovative and advanced technology, amazing high-quality gaming audio, crystal-clear communication, lightweight and comfortable designs, and ease-of-use are just a few features that make Turtle Beach a fan-favorite brand and market leader in console audio for 10 years running. In 2019 Turtle Beach acquired ROCCAT, a leading PC accessories brand that combines detail-loving German innovation with a genuine passion for designing the best PC gaming products. Under the ROCCAT brand, Turtle beach provides award-winning keyboards and mice for PC gamers. Turtle Beach’s shares are traded on the Nasdaq Exchange under the symbol: HEAR.
Turtle Beach gaming headsets
Overview of Turtle Beach Corp's 4th quarter 2019 earnings report
The numbers below refers to the latest quarter unless specified otherwise:
- Total revenue: $101.764 million (down from $111.319 million from the same quarter of the previous year)
- Revenues decreased by -8.5% over the last 12 months
- Cost of revenue: $66.052 million (down from $68.428 million for the same quarter of the previous year)
- Cost of revenue decreased by -3.5% over the last 12 months
- Some margin pressure on Turtle Beach as revenues declined at a faster rate than their cost of revenues
- Net income: $20.386 million (down from $24.614 million for the same quarter of the previous year)
- Diluted earnings per share: $1.29 (down from $1.33 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 15.748 million (up from 16.216 million for the same quarter of the previous year)
- Cash and cash equivalents: $8.249 million
- Cash and cash equivalents per share: $0.52
- Cash and cash equivalents makes up 9.4% of Turtle Beach's market capital
- Cash and cash equivalents makes up 7% of Turtle Beach's total assets
- Receivables: $44.530 million
- Receivables makes up 33.9% of Turtle Beach's total assets
- Inventories: $45.711 million
- Inventories makes up 34.8% of Turtle Beach's total assets
- Stockholders equity in Turtle Beach: $63.386 million
- Stockholders equity per share: $4.02
- Turtle Beach's is trading at 1.37 times its stockholders equity which is well outside the expected range of between 2 and 4 times that most firms tend to trade at
- The S&P 500 price to book value is at 3.34 (Click here to find out more details about the S&P 500)
- Cash generated from operations (for the full fiscal year): $39.347 million
- Cash generated from operations per share (for the full fiscal year): $2.49
Turtle Beach Corporation's management commentary on their 4th quarter 2019 earnings report
SAN DIEGO, March 10, 2020 /PRNewswire/ — Turtle Beach Corporation (Nasdaq: HEAR), a leading gaming audio and accessory brand, reported financial results for the fourth quarter and full year ended December 31, 2019.
“As indicated in our pre-announcement, our 2019 sales were the second highest in our history, with 2019 playing out close to our expectations,” said Juergen Stark, CEO, Turtle Beach Corporation. “While we expect the console gaming market to be soft as consumers prepare for Sony and Microsoft’s new consoles slated to launch this fourth quarter, we expect the market to return to growth in 2021. We anticipate continued growth in our PC gaming accessories sales in 2020 and plan to invest in product and brand development to increase our share in this attractive portion of the market.”
Balance Sheet Highlights
At December 31, 2019, the Company had $8.2 million of cash and cash equivalents with $15.7 million of outstanding debt under its revolving line of credit. This compares to $7.1 million of cash and cash equivalents with $37.4 million of outstanding debt under its revolving credit facility at December 31, 2018.
Since Turtle Beach’s share repurchase program was announced on April 10, 2019, the Company has repurchased 271,300 shares for $2.5 million, or an average of $9.30 per share.
“As indicated in our pre-announcement, our 2019 sales were the second highest in our history, with 2019 playing out close to our expectations,” said Juergen Stark, CEO, Turtle Beach Corporation. “While we expect the console gaming market to be soft as consumers prepare for Sony and Microsoft’s new consoles slated to launch this fourth quarter, we expect the market to return to growth in 2021. We anticipate continued growth in our PC gaming accessories sales in 2020 and plan to invest in product and brand development to increase our share in this attractive portion of the market.”
Balance Sheet Highlights
At December 31, 2019, the Company had $8.2 million of cash and cash equivalents with $15.7 million of outstanding debt under its revolving line of credit. This compares to $7.1 million of cash and cash equivalents with $37.4 million of outstanding debt under its revolving credit facility at December 31, 2018.
Since Turtle Beach’s share repurchase program was announced on April 10, 2019, the Company has repurchased 271,300 shares for $2.5 million, or an average of $9.30 per share.
2020 Outlook
For the first quarter of 2020, the Company expects revenue to range between $29 million and $31 million. Adjusted EBITDA is expected to range between $(6.5) million and $(7.5) million. Net loss per diluted share is expected to range between $(0.73) and $(0.81), and Adjusted loss per diluted share is expected to range between $(0.72) and $(0.80), both reflecting the aforementioned revenue and EBITDA forecasts. Despite the anticipation of a pretax loss, the Company expects to have a modest tax provision because of taxes in various jurisdictions.
For the full year 2020, the Company expects revenue to range between $214 million and $224 million. Adjusted EBITDA is expected to range between $5 million and $10 million, reflecting an incremental investment of approximately $9 million to expand the Company’s market share in the PC accessories market. Net loss per diluted share is expected to range between $(0.13) and $(0.46), and adjusted net loss per diluted share is expected to range between $(0.12) and $(0.45), both reflecting the aforementioned revenue and EBITDA forecasts. Despite the anticipation of a pretax loss, the Company expects to have a modest tax provision because of taxes in various jurisdictions.
For the first quarter of 2020, the Company expects revenue to range between $29 million and $31 million. Adjusted EBITDA is expected to range between $(6.5) million and $(7.5) million. Net loss per diluted share is expected to range between $(0.73) and $(0.81), and Adjusted loss per diluted share is expected to range between $(0.72) and $(0.80), both reflecting the aforementioned revenue and EBITDA forecasts. Despite the anticipation of a pretax loss, the Company expects to have a modest tax provision because of taxes in various jurisdictions.
For the full year 2020, the Company expects revenue to range between $214 million and $224 million. Adjusted EBITDA is expected to range between $5 million and $10 million, reflecting an incremental investment of approximately $9 million to expand the Company’s market share in the PC accessories market. Net loss per diluted share is expected to range between $(0.13) and $(0.46), and adjusted net loss per diluted share is expected to range between $(0.12) and $(0.45), both reflecting the aforementioned revenue and EBITDA forecasts. Despite the anticipation of a pretax loss, the Company expects to have a modest tax provision because of taxes in various jurisdictions.
Turtle Beach (NASDAQ:HEAR) stock price history
The image below, obtained from Google, shows the stock price history of Turtle Beach Corporation (NASDAQ: HEAR) over the last 5 years, and its not been a good time for Turtle Beach stockholders. 5 years ago the stock of Turtle Beach was trading at $9.50 and its currently trading at $5.52. That's a loss of-41.8% suffered by Turtle Beach stockholders over the last 5 years.
The stock of Turtle Beach is trading at a lot closer to its 52 week low of $5.32 than it is to its 52 week high of $16.72 which is a clear indication that the short term sentiment and momentum of Turtle Beach is very negative at this point in time.
The stock of Turtle Beach is trading at a lot closer to its 52 week low of $5.32 than it is to its 52 week high of $16.72 which is a clear indication that the short term sentiment and momentum of Turtle Beach is very negative at this point in time.
Turtle Beach Corporation (NASDAQ:HEAR) stock price history over the last 5 years
Recent coverage Turtle Beach Corporation
The extract below discusses the latest earnings report from Turtle Beach as obtained from Benzinga.com
Turtle Beach HEAR shares are trading higher after the company reported better-than-expected Q4 EPS and sales results. The company also issued Q1 sales guidance above estimates.
Read the full article here
Turtle Beach HEAR shares are trading higher after the company reported better-than-expected Q4 EPS and sales results. The company also issued Q1 sales guidance above estimates.
Read the full article here
Camo Turtle Beach Headset
Turtle Beach (NASDAQ: HEAR) latest stock valuation
So based on the earnings report and earnings guidance of Turtle Beach (NASDAQ: HEAR) and what do we value Turtle Beach stock at? Based on the earnings reported and the fiscal guidance provided by Turtle Beach our valuation model provides a target (full value) price for Turtle Beach at $4 a stock.
We therefore believe the stock is overvalued at its current price and we would not recommend long term fundamental or value investors invest into the stock at its current price, but rather look to enter the stock at least 10% below our target (full value) price of $4. Therefore a good entry point into Turtle Beach would be at $3.60 or below.
We expect the stock of Turtle Beach to pull back even further to levels closer to our target price (full value price) in coming weeks and months as the group's expectations of a loss for the 2020 fiscal year means little earnings prospects and therefore we value the group at their stockholders equity per share.
We therefore believe the stock is overvalued at its current price and we would not recommend long term fundamental or value investors invest into the stock at its current price, but rather look to enter the stock at least 10% below our target (full value) price of $4. Therefore a good entry point into Turtle Beach would be at $3.60 or below.
We expect the stock of Turtle Beach to pull back even further to levels closer to our target price (full value price) in coming weeks and months as the group's expectations of a loss for the 2020 fiscal year means little earnings prospects and therefore we value the group at their stockholders equity per share.
Next earnings release of Turtle Beach
It is expected that Turtle Beach will release their 1st quarter 2020 earnings towards the middle of June 2020