We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Turtle Beachis a Zacks Rank #1 (Strong Buy) and has posted some remarkable earnings of late. Let's take a look at the recent results and explore how this stock could reach $40 in the near term in this Bull Of The Day article.
Description
Turtle Beach Corporation is an American sound card and headset manufacturer. In 1995, the company merged with Voyetra, a company that made custom software for sound cards, to form Voyetra Turtle Beach, then headquartered in Valhalla, New York.
Recent Earnings Reports
The last two earnings reports have been absolute monster beats. Let's look at the May report first and then the August release.
Back on May 10, the company posted earnings of $0.16 when the Zacks Consensus Estimate was calling for a breakeven quarter. The company also posted a small beat on the topline with $40.9M in revenue compared to the $39.8M Zacks Consensus Estimate.
It should be noted that the stock closed at $6.94 before that earnings report.
The August report was even better. The company reported EPS of $0.40 when the Zacks Consensus Estimate was looking for a loss of 5 cents. Revenues were $60.8M, well above the $47.9M Zacks Consensus Estimate.
The company went on to guide revenues higher for the remainder of the year.
The stock closed $30.35 before the August report.
Analysts Moves
Before I get to the analyst move let's just think about the move between reports. The stock moved from $7 to $30 and my math tells me that is a big move. What is more, the second report was even better than the first!
Lake Street upped their target price on HEAR to $40 from $15.
Oppenheimer inched their number up to $35 from $31.
I don't have access to the DA Davidson report, but they started coverage on the stock on July 10 with a buy.
Valuation And Estimates
So how do we get a $40 potential price for HEAR? Well, as a guy that looks mostly at fundamentals, I see the Zacks Consensus Estimate for 2018 at $2.17 and the 2019 number at $1.99. Right now the 2019 numbers carry little visibility, but we have seen a recent history of strong demand and excellent execution.
A 20x multiple of next year’s earnings gets me right to about $40... and that is very reasonable considering the company just posted 218% year over year revenue growth and a 48% sequential lift as well.
At the moment, I see HEAR trading at 11x forward estimates and 30x trailing. This is well below the market multiple and represents value for a growing company.
This brings me to the question of why isn't this stock in the mid 30's or even testing $40 now?
After the recent earnings release, the company updated a shelf offering of $100M. They noted on the earnings call that they do not plan on utilizing the offer just yet, but dilution concerns are significant as there only ~14M shares outstanding.
If the company would only raise $10M or $15M from the shelf, then the concerns of a massive dilutive event would ease and allow buyers to step in with confidence. At this valuation, shares of HEAR are still very attractive.
Autohomeis a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today. I try to avoid almost all Chinese stocks and not just because of the trade war or tariff tantrums that have hit the market of late. I simply do not trust the accounting and audits of these stocks as I have seen too many frauds come out of China. That said, I do not know if ATHM is a fraud or not, but I do know that estimates are falling and that is not what we want to see.
Description
Autohome Inc. is the leading online destination for automobile consumers in China. Its mission is to enhance the car-buying and ownership experience for auto consumers in China. Autohome provides professionally produced and user-generated content, a comprehensive automobile library, and extensive automobile listing information to automobile consumers, covering the entire car purchase and ownership cycle.
Recent Earnings
ATHM recently posted a 3 cent beat of the Zacks Consensus Estimate which translated into a 3%positive earnings surprise. It is not that often we see a stock that recently beat become the Bear of the Day.
Estimates
The main reason this stock has fallen to a Zacks Rank #5 (Strong Sell) is that the Zacks Consensus Estimate for 2018 and 2019 keeps moving lower.
30 days ago, the Zacks Consensus Estimate for 2018 was at $3.61, but it has since moved lower to $3.40.
Over the same time period, the Zacks Consensus Estimate for 2019 moved from $4.59 to $4.26.
Stock Tumbles
A quick look at the chart and you can see the stock is down 50% from recent highs. The stock was near $120 at the start of the summer, but negative headlines and lower earnings estimates have pushed this stock down to the $80 range.
Additional content:
Nvidia Beats but Lowers Guidance, Shares -5%
One of the darlings of the computer graphics space, Nvidia, has reported fiscal Q2 2019 (ended July) earnings after the closing bell today, with headlines beating on both top and bottom lines. Earnings of $1.94 per share beat the Zacks consensus by 11 cents, up 92% year over year. Revenues eked out a beat on the top line, as well: $3.12 billion outdid the $3.11 billion analysts were looking for and up 40% year over year, although down 3% sequentially.
Shares are selling off in late trading on the news, more than -5% at one stage following the Q2 release. Revenue guidance for Q3 came in light at $3.25 billion. And the stellar growth of the past several quarters will soon be running up against much tougher comps in a space already feeling pressure -- in Nvidia's case, partially due to a Chinese gaming ban.
The company has big plans for its latest Graphics Processing Unit (GPU), Turing, which the company considers a "giant leap forward." Nvidia also continues to buy back shares and increase dividend yields to investors. Shares of NVDA had climbed nearly 60% over the past year and more than 20% year to date, but the Zacks Rank #3 (Hold)-rated company look toward a lower open Friday morning.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Turtle Beach, Autohome and Nvidia highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 17, 2018 – Zacks Equity Research highlights Turtle Beach (HEAR - Free Report) as the Bull of the Day, Autohome (ATHM - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nvidia (NVDA - Free Report) .
Here is a synopsis of all three stocks:
Bull of the Day:
Turtle Beachis a Zacks Rank #1 (Strong Buy) and has posted some remarkable earnings of late. Let's take a look at the recent results and explore how this stock could reach $40 in the near term in this Bull Of The Day article.
Description
Turtle Beach Corporation is an American sound card and headset manufacturer. In 1995, the company merged with Voyetra, a company that made custom software for sound cards, to form Voyetra Turtle Beach, then headquartered in Valhalla, New York.
Recent Earnings Reports
The last two earnings reports have been absolute monster beats. Let's look at the May report first and then the August release.
Back on May 10, the company posted earnings of $0.16 when the Zacks Consensus Estimate was calling for a breakeven quarter. The company also posted a small beat on the topline with $40.9M in revenue compared to the $39.8M Zacks Consensus Estimate.
It should be noted that the stock closed at $6.94 before that earnings report.
The August report was even better. The company reported EPS of $0.40 when the Zacks Consensus Estimate was looking for a loss of 5 cents. Revenues were $60.8M, well above the $47.9M Zacks Consensus Estimate.
The company went on to guide revenues higher for the remainder of the year.
The stock closed $30.35 before the August report.
Analysts Moves
Before I get to the analyst move let's just think about the move between reports. The stock moved from $7 to $30 and my math tells me that is a big move. What is more, the second report was even better than the first!
Lake Street upped their target price on HEAR to $40 from $15.
Oppenheimer inched their number up to $35 from $31.
I don't have access to the DA Davidson report, but they started coverage on the stock on July 10 with a buy.
Valuation And Estimates
So how do we get a $40 potential price for HEAR? Well, as a guy that looks mostly at fundamentals, I see the Zacks Consensus Estimate for 2018 at $2.17 and the 2019 number at $1.99. Right now the 2019 numbers carry little visibility, but we have seen a recent history of strong demand and excellent execution.
A 20x multiple of next year’s earnings gets me right to about $40... and that is very reasonable considering the company just posted 218% year over year revenue growth and a 48% sequential lift as well.
At the moment, I see HEAR trading at 11x forward estimates and 30x trailing. This is well below the market multiple and represents value for a growing company.
This brings me to the question of why isn't this stock in the mid 30's or even testing $40 now?
After the recent earnings release, the company updated a shelf offering of $100M. They noted on the earnings call that they do not plan on utilizing the offer just yet, but dilution concerns are significant as there only ~14M shares outstanding.
If the company would only raise $10M or $15M from the shelf, then the concerns of a massive dilutive event would ease and allow buyers to step in with confidence. At this valuation, shares of HEAR are still very attractive.
Bear of the Day:
Autohomeis a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today. I try to avoid almost all Chinese stocks and not just because of the trade war or tariff tantrums that have hit the market of late. I simply do not trust the accounting and audits of these stocks as I have seen too many frauds come out of China. That said, I do not know if ATHM is a fraud or not, but I do know that estimates are falling and that is not what we want to see.
Description
Autohome Inc. is the leading online destination for automobile consumers in China. Its mission is to enhance the car-buying and ownership experience for auto consumers in China. Autohome provides professionally produced and user-generated content, a comprehensive automobile library, and extensive automobile listing information to automobile consumers, covering the entire car purchase and ownership cycle.
Recent Earnings
ATHM recently posted a 3 cent beat of the Zacks Consensus Estimate which translated into a 3%positive earnings surprise. It is not that often we see a stock that recently beat become the Bear of the Day.
Estimates
The main reason this stock has fallen to a Zacks Rank #5 (Strong Sell) is that the Zacks Consensus Estimate for 2018 and 2019 keeps moving lower.
30 days ago, the Zacks Consensus Estimate for 2018 was at $3.61, but it has since moved lower to $3.40.
Over the same time period, the Zacks Consensus Estimate for 2019 moved from $4.59 to $4.26.
Stock Tumbles
A quick look at the chart and you can see the stock is down 50% from recent highs. The stock was near $120 at the start of the summer, but negative headlines and lower earnings estimates have pushed this stock down to the $80 range.
Additional content:
Nvidia Beats but Lowers Guidance, Shares -5%
One of the darlings of the computer graphics space, Nvidia, has reported fiscal Q2 2019 (ended July) earnings after the closing bell today, with headlines beating on both top and bottom lines. Earnings of $1.94 per share beat the Zacks consensus by 11 cents, up 92% year over year. Revenues eked out a beat on the top line, as well: $3.12 billion outdid the $3.11 billion analysts were looking for and up 40% year over year, although down 3% sequentially.
Shares are selling off in late trading on the news, more than -5% at one stage following the Q2 release. Revenue guidance for Q3 came in light at $3.25 billion. And the stellar growth of the past several quarters will soon be running up against much tougher comps in a space already feeling pressure -- in Nvidia's case, partially due to a Chinese gaming ban.
The company has big plans for its latest Graphics Processing Unit (GPU), Turing, which the company considers a "giant leap forward." Nvidia also continues to buy back shares and increase dividend yields to investors. Shares of NVDA had climbed nearly 60% over the past year and more than 20% year to date, but the Zacks Rank #3 (Hold)-rated company look toward a lower open Friday morning.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.