Turtle Beach (HEAR) Surges 8.7%: Is This an Indication of Further Gains?

Turtle Beach HEAR shares ended the last trading session 8.7% higher at $16.75. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 27.2% gain over the past four weeks.

Turtle Beach recently acquired PDP, a premier gaming accessories provider, for an enterprise value of $118 million. The buyout combined the capabilities of two powerhouse organizations well known for their product innovation and impressive growth trajectories. With a vision to be a dominant player in the gaming peripherals market, Turtle Beach aims to leverage PDP's expertise in designing and distributing aftermarket gaming accessories, such as controllers and headsets. This will significantly boost Turtle Beach’s product portfolio and strengthen its market positioning.

A key aspect of the agreement is substantial cost synergies projected to materialize with annual run-rate savings expected to reach around $10 to $12 million. In addition to that, potential revenue synergies and best practice sharing are poised to improve the financial performance of the company. For 2024, it anticipates net revenues in the range of $370-380 million, primarily driven by the PDP buyout, indicating a solid growth from $258.1 million in fiscal 2023.

This audio technology company is expected to post quarterly loss of $0.18 per share in its upcoming report, which represents a year-over-year change of +33.3%. Revenues are expected to be $53.63 million, up 4.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Turtle Beach, the consensus EPS estimate for the quarter has been revised 3.9% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on HEAR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Turtle Beach is part of the Zacks Communication - Components industry. Viav Solutions (VIAV), another stock in the same industry, closed the last trading session 2.5% lower at $9.61. VIAV has returned 2.9% in the past month.

Viav Solutions' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.07. Compared to the company's year-ago EPS, this represents a change of -12.5%. Viav Solutions currently boasts a Zacks Rank of #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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