Critical Review: Turtle Beach (TBCH) and Its Peers

Turtle Beach (NASDAQ:TBCH) is one of 41 publicly-traded companies in the “Communications equipment, not elsewhere classified” industry, but how does it contrast to its peers? We will compare Turtle Beach to related companies based on the strength of its analyst recommendations, institutional ownership, dividends, valuation, earnings, profitability and risk.

Insider and Institutional Ownership

67.0% of Turtle Beach shares are owned by institutional investors. Comparatively, 37.4% of shares of all “Communications equipment, not elsewhere classified” companies are owned by institutional investors. 5.1% of Turtle Beach shares are owned by company insiders. Comparatively, 13.0% of shares of all “Communications equipment, not elsewhere classified” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Turtle Beach and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Turtle Beach	0	0	1	0	3.00
Turtle Beach Competitors	223	480	1015	49	2.50

Turtle Beach currently has a consensus target price of $21.00, indicating a potential upside of 53.73%. As a group, “Communications equipment, not elsewhere classified” companies have a potential upside of 30.93%. Given Turtle Beach’s stronger consensus rating and higher probable upside, analysts clearly believe Turtle Beach is more favorable than its peers.

Profitability

This table compares Turtle Beach and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Turtle Beach	1.41%	9.18%	3.88%
Turtle Beach Competitors	-18.70%	-50.08%	-5.05%

Volatility and Risk

Turtle Beach has a beta of 2.05, meaning that its stock price is 105% more volatile than the S&P 500. Comparatively, Turtle Beach’s peers have a beta of -8.06, meaning that their average stock price is 906% less volatile than the S&P 500.

Valuation and Earnings

This table compares Turtle Beach and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Turtle Beach	$326.23 million	-$17.68 million	17.74
Turtle Beach Competitors	$398.06 million	-$90.17 million	22.57

Turtle Beach’s peers have higher revenue, but lower earnings than Turtle Beach. Turtle Beach is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Turtle Beach beats its peers on 10 of the 13 factors compared.

Turtle Beach Company Profile

Turtle Beach Corporation operates as an audio technology company. It develops, commercializes, and markets gaming headset solutions for various platforms, including video game and entertainment consoles, personal computers, handheld consoles, tablets, and mobile devices under the Turtle Beach brand. The company also offers gaming headsets, keyboards, mice, mousepads, and other accessories for the personal computer peripherals market under the brand of ROCCAT, as well as digital USB and analog microphones under the Neat Microphones brand. It serves retailers, distributors, and other customers in North America, the United Kingdom, Europe, and internationally. The company was founded in 1975 and is headquartered in White Plains, New York.