Turtle Beach (TBCH) AI Stock Analysis

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Turtle Beach

(NASDAQ:TBCH)

64Neutral

Turtle Beach shows strong financial recovery and positive earnings outlook, which are the most significant factors supporting its stock score. While the technical analysis indicates bearish trends, the company's valuation remains reasonable. The new CFO appointment is a positive strategic move, bolstering the company's growth potential.

Positive Factors

Acquisitions

The acquisition of PDP has proven significantly accretive, adding immediate scale, product diversification and cost synergies.

Brand Strategy

Rebranding PDP to Turtle Beach is expected to drive sales higher as the TB brand is well-known and highly regarded.

Financial Performance

Management raised 2024 midpoint guidance for adjusted EBITDA to $56.5M, which implies strong performance.

Negative Factors

Macroeconomic Factors

Despite the strong outlook, tariffs and macroeconomic headwinds overshadow the near-term landscape.

Revenue Guidance

Management introduced 2025 guidance for revenue of $395M-$405M, which is lower than the prior estimate of $440.0M.

Revenue Impact

Tariffs will impact FY 2025 revenue, but PDP integration synergies should drive better than expected EBITDA margin expansion.

Turtle Beach (TBCH) vs. S&P 500 (SPY)

Market Cap

$217.88M

Dividend YieldN/A

Average Volume (3M)418.06K

Price to Earnings (P/E)14.3

Beta (1Y)2.07

Revenue Growth44.41%

EPS GrowthN/A

CountryUS

Employees262

SectorTechnology

Sector Strength44

IndustryConsumer Electronics

Share Statistics

EPS (TTM)0.77

Shares Outstanding19,971,117

10 Day Avg. Volume445,425

30 Day Avg. Volume418,060

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.78

Price to Cash Flow (P/CF)5.10

P/FCF Ratio4.60

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$23.50

Price Target Upside121.07% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Turtle Beach Business Overview & Revenue Model

Company DescriptionTurtle Beach Corporation (TBCH) is a leading global provider of gaming headsets and audio accessories. The company operates in the consumer electronics sector, focusing on creating high-quality audio products designed to enhance the gaming experience. Turtle Beach's core products include wired and wireless headsets for gaming consoles, PCs, and mobile devices, catering to a wide range of gamers from casual to professional.

How the Company Makes MoneyTurtle Beach generates revenue primarily through the sale of its gaming headsets and related audio accessories. The company markets and sells its products through various channels, including direct-to-consumer sales via its website, as well as through major retailers and online platforms. Key revenue streams include sales from its flagship Turtle Beach gaming headsets and its ROCCAT brand of PC gaming accessories. Strategic partnerships with gaming console manufacturers and collaborations with esports organizations further bolster sales. The company also benefits from the growing popularity of gaming and esports, which drives demand for high-performance audio equipment.

Turtle Beach Financial Statement Overview

Summary

Turtle Beach displays a commendable financial recovery with strong revenue growth and improved profitability. The balance sheet is stable, supported by a solid equity base and reasonable debt levels. Cash flow improvements signify a positive shift in operational efficiency, although consistency in free cash flow remains a focus area. The overall financial health is strong, with positive trends in key financial metrics, positioning the company well for future growth.

Income Statement

Positive

Turtle Beach shows a strong recovery in revenue with a substantial growth rate from the previous year. The company has improved its gross and net profit margins significantly, turning a previous net loss into a profit. However, the EBIT and EBITDA margins show room for improvement, indicating potential efficiency gains. The revenue growth trajectory is positive, contributing to a robust income statement performance.

Balance Sheet

Positive

The company's balance sheet reflects a healthy equity position with a satisfactory debt-to-equity ratio. The return on equity has improved with the return to profitability, but the equity ratio indicates a moderate reliance on liabilities. Overall, the balance sheet demonstrates stability with a balanced asset structure, though there are opportunities to optimize leverage.

Cash Flow

Positive

While free cash flow growth has been inconsistent, the company has managed to reverse previous negative operating cash flows to positive figures, showcasing improved cash generation capabilities. The operating and free cash flow to net income ratios are favorable, indicating effective cash conversion, but further consistency in free cash flow growth could enhance performance.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
372.77M	258.12M	240.17M	366.35M	360.09M
	Gross Profit
128.98M	75.50M	49.19M	128.38M	133.79M
	EBIT
20.03M	-16.44M	-51.48M	20.43M	49.17M
	EBITDA
30.13M	-12.00M	-47.42M	25.84M	58.17M
	Net Income Common Stockholders
16.18M	-17.68M	-59.55M	17.72M	38.75M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.99M	18.73M	11.40M	37.72M	46.68M
	Total Assets
298.86M	149.97M	163.39M	230.50M	203.45M
	Total Debt
96.28M	0.00	19.05M	0.00	0.00
	Net Debt
83.29M	-18.73M	7.66M	-37.72M	-46.68M
	Total Liabilities
178.26M	64.89M	74.45M	89.14M	87.05M
	Stockholders Equity
120.60M	85.08M	88.94M	141.37M	116.40M
Cash Flow		Free Cash Flow
847.00K	24.89M	-45.40M	-5.95M	45.39M
	Operating Cash Flow
5.76M	27.04M	-41.85M	-327.00K	51.05M
	Investing Cash Flow
-82.21M	-2.16M	-3.55M	-8.12M	-5.66M
	Financing Cash Flow
71.05M	-17.85M	19.71M	-56.00K	-7.41M

Turtle Beach Technical Analysis

Technical Analysis Sentiment

Negative

Last Price10.63

Price Trends

50DMA

14.73

Negative

100DMA

16.10

Negative

200DMA

15.57

Negative

Market Momentum

MACD

-1.14

Positive

RSI

33.78

Neutral

STOCH

43.99

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TBCH, the sentiment is Negative. The current price of 10.63 is below the 20-day moving average (MA) of 12.48, below the 50-day MA of 14.73, and below the 200-day MA of 15.57, indicating a bearish trend. The MACD of -1.14 indicates Positive momentum. The RSI at 33.78 is Neutral, neither overbought nor oversold. The STOCH value of 43.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TBCH.

Turtle Beach Risk Analysis

Turtle Beach disclosed 31 risk factors in its most recent earnings report. Turtle Beach reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Turtle Beach Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AUDC	66 Neutral	$265.93M	17.93	8.06%	4.02%	-0.90%	80.24%
TBCH	64 Neutral	$217.88M	14.25	15.74%	―	44.41%	―
Sector *	58 Neutral	$9.82B	10.00	-6.63%	3.09%	7.49%	-11.58%
BKSY	53 Neutral	$223.78M	―	-60.94%	―	8.04%	5.52%
NRDY	48 Neutral	$260.90M	―	-92.62%	―	-1.64%	9.99%
MVIS	46 Neutral	$277.75M	―	-134.07%	―	-35.31%	-2.18%
CAN	44 Neutral	$198.65M	―	-81.29%	―	5.59%	32.06%

* Technology Sector Average

Performance Comparison

TBCH

Turtle Beach

10.63

-3.51

-24.82%

AUDC

Audiocodes

8.96

-1.37

-13.26%

MVIS

Microvision

1.13

-0.27

-19.29%

CAN

Canaan

0.68

-0.27

-28.42%

BKSY

BlackSky Technology

6.63

5.40

439.02%

NRDY

Nerdy

1.43

-1.14

-44.36%

Turtle Beach Earnings Call Summary

Earnings Call Date: Mar 13, 2025 | % Change Since: -25.61% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong positive performance in Q4 2024 with record-breaking revenue and significant EBITDA growth, driven by strategic acquisitions and market expansion. However, some challenges include inventory loss, potential tariff impacts, and a softer retail market expected in the first half of 2025. Despite these challenges, the company's strategic initiatives and market positioning suggest a favorable outlook.

Highlights

Record-Breaking Quarterly Revenue

For Q4 2024, Turtle Beach achieved its highest ever quarterly results with revenue at $146.1 million, marking a 46.8% increase compared to the same quarter last year.

Significant EBITDA Growth

Adjusted EBITDA for the fourth quarter was $35.7 million, up from $14 million in the same period last year, reflecting improved operational efficiency.

PDP Acquisition Impact

The acquisition of PDP significantly expanded Turtle Beach's product portfolio and market reach, contributing to increased revenue and cost synergies exceeding initial expectations.

Gaming Accessories Market Performance

Turtle Beach's gaming accessories outpaced the overall market with a 6% growth in 2024, bolstered by new product launches.

Shareholder Value Enhancement

Turtle Beach executed $28 million in share buybacks in 2024, the largest in its history, at an average price of $15.39 per share.

Lowlights

Inventory Loss Impact

A $3.4 million charge related to a loss of inventory in transit affected the cost of sales for the fourth quarter.

Challenging Retail Market Conditions

The company faced volatility in the retail market, with expectations of a softer first half of 2025 due to recent trends.

Potential Tariff Impact

The dynamic tariff environment poses potential risks, with several million in EBITDA impact if current tariffs continue or increase.

Company Guidance

During the Turtle Beach Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for 2025, projecting full-year revenue to be between $395 million and $405 million, representing 7% growth at the midpoint compared to 2024. They also anticipate adjusted EBITDA to range from $68 million to $72 million, marking a 24% increase and a more than 200 basis point improvement in adjusted EBITDA margin compared to the previous year. The company expects the first quarter to account for approximately 15% to 16% of the full-year revenue, reflecting a stronger second half driven by anticipated new game and console launches. Additionally, Turtle Beach is actively monitoring the potential impact of tariffs, which are estimated to affect EBITDA by several million dollars if tariffs were to change.

Turtle Beach Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Turtle Beach Appoints New CFO for Growth Strategy

Positive

Jan 27, 2025

On January 27, 2025, Turtle Beach Corporation announced the retirement of John Hanson as Chief Financial Officer and the appointment of Mark Weinswig as his successor, effective February 3, 2025. Hanson will serve as a senior advisor during a six-month transition period. Weinswig, with over 25 years of financial leadership experience, previously served as CFO at Ouster and Velodyne Lidar, and his strategic expertise is expected to support Turtle Beach’s growth strategy and enhance shareholder value.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.