Thanks to strong demand for its products and substantial increases in product supply, Turtle Beach Corporation (HEAR - Free Report) raised its revenue outlook for the second quarter of 2020. The company’s shares increased 17.2% on the news in yesterday’s session, closing at $13.67.
The San Diego, CA-based audio technology company now anticipates revenues in the June quarter to be between $74 million and $77 million compared with the earlier guidance (provided on May 7) of $42-$47 million. The projected figure suggests a rise from $41.3 million reported in the second quarter of 2019. The estimated figure also calls for an increase of at least 21% from $60.8 million recorded in second-quarter 2018, when demand for console headsets was driven by battle royale games like Fortnite.
Based on current visibility, the company’s revenues in the ongoing quarter will surpass the high end of its earlier forecast by more than 55%. Notably, consumer demand for console and PC gaming headsets as well as accessories is stronger than expected. Turtle Beach has been able to increase supply and respond to changes in the market with the desired speed.
The company aims to expand from being the leader in console gaming headsets into becoming a top gaming accessory brand for all platforms. It is well placed to benefit from a solid product performance coupled with market share gains, led by innovation, strong brand and retail partnerships. The combination of increased gaming activity, distance learning and work-from-home trends should continue to drive higher demand for headsets. Turtle Beach’s ability to obtain greater capacity for both manufacturing and shipping is noteworthy.
The company expects to enter July with channel inventories, which still need replenishment. It projects higher revenues to drive adjusted EBITDA for the second quarter as well as 2020, partly offset by costs to achieve incremental sales. The company expects to update its outlook for 2020 when second-quarter results are reported in early August.
Backed by diligent execution of operational plans, shares of Turtle Beach have skyrocketed 221.6% compared with 32.4% growth of the industry in the past three months.
The company has a trailing four-quarter positive earnings surprise of 46.4%, on average. The Zacks Consensus Estimate for its current-year earnings has been revised as much as 102.5% upward in the past 60 days.
Turtle Beach Corporation Price and Consensus
Turtle Beach currently flaunts a Zacks Rank #1 (Strong Buy) and a VGM Score of B.
It seems that HEAR is a solid bet for investors. So make sure you’re taking full advantage of it.
Some other top-ranked stocks in the broader industry are Ooma, Inc. (OOMA - Free Report) , Acacia Communications, Inc. (ACIA - Free Report) and Chegg, Inc. (CHGG - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ooma has a trailing four-quarter positive earnings surprise of 228.2%, on average.
Acacia has a trailing four-quarter positive earnings surprise of 17.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Chegg has a trailing four-quarter positive earnings surprise of 49.9%, on average.
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