Are Investors Undervaluing Turtle Beach (HEAR) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Turtle Beach (HEAR). HEAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.40, while its industry has an average P/E of 20.53. Over the past 52 weeks, HEAR's Forward P/E has been as high as 23.09 and as low as 5.40, with a median of 9.57.
Investors should also note that HEAR holds a PEG ratio of 1.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HEAR's industry has an average PEG of 1.81 right now. Over the past 52 weeks, HEAR's PEG has been as high as 1.78 and as low as 0.36, with a median of 0.68.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HEAR has a P/S ratio of 0.52. This compares to its industry's average P/S of 1.24.
Finally, our model also underscores that HEAR has a P/CF ratio of 3.76. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.19. Within the past 12 months, HEAR's P/CF has been as high as 26.30 and as low as 2.98, with a median of 6.95.
Value investors will likely look at more than just these metrics, but the above data helps show that Turtle Beach is likely undervalued currently. And when considering the strength of its earnings outlook, HEAR sticks out at as one of the market's strongest value stocks.
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