Turtle Beach (HEAR) to Report Q2 Earnings: What's in Store?

Turtle Beach Corporation HEAR is slated to report second-quarter 2020 results on Aug 6, before the opening bell. In the March-end quarter, the company delivered an earnings surprise of 68.9%. Notably, Turtle Beach has a trailing four-quarter earnings surprise of 46.4%, on average.

The San Diego, CA-based audio technology company is expected to have recorded higher revenues on a year-over-year basis, courtesy of strong demand for its products and substantial increases in product supply.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly announcement.

Factors at Play

During the quarter under review, Turtle Beach expanded its partnership with NRG Esports — a top e-sports organization fielding some of the best professional teams. ROCCAT, Turtle Beach’s PC brand, became NRG’s official gaming accessories partner for keyboards, mice and other PC peripherals.

Turtle Beach witnessed strong demand for its products including record-setting retail sales. The company’s headsets are also well suited for learning and working remotely via video or audio conferencing, resulting from the COVID-19 situation. According to the NPD Group, an American market research company, Turtle Beach’s retail sales in April 2020 were more than double the brand’s prior all-time high from April 2018.

The data showed that all seven top-selling headsets and eight of the top-10 best-selling headsets were from Turtle Beach. The combination of increased gaming activity, distance learning and work-from-home trends continued to drive higher demand for headsets. Meanwhile, Turtle Beach’s ability to obtain greater capacity for both manufacturing and shipping along with an increase in market share is noteworthy.

The company had raised its revenue outlook for the second quarter of 2020. Turtle Beach then anticipated revenues to be between $74 million and $77 million compared with the earlier guidance (provided on May 7) of $42-$47 million. The company’s revenues are expected to have surpassed the high end of its earlier forecast by more than 55%.

Consumer demand for console and PC gaming headsets as well as accessories was stronger than expected. Turtle Beach responded to changes in the market with the desired speed. Such developments are likely to have had a positive impact on the company’s second-quarter top line.

For the June-end quarter, the Zacks Consensus Estimate for total revenues is pegged at $76 million that indicates growth of 85.4% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 29 cents, which calls for an improvement of 583.3% from the prior-year quarter’s recorded figure.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Turtle Beach this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Turtle Beach’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 29 cents.

Turtle Beach Corporation Price and EPS Surprise

Turtle Beach Corporation Price and EPS Surprise

Turtle Beach Corporation price-eps-surprise | Turtle Beach Corporation Quote

Zacks Rank: Turtle Beach sports a Zacks Rank #1, at present

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Vista Outdoor Inc. VSTO is slated to release first-quarter fiscal 2021 results on Aug 6. It has an Earnings ESP of +1,300.12% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Verra Mobility Corporation VRRM is scheduled to release second-quarter 2020 results on Aug 6. The company has an Earnings ESP of +133.33% and a Zacks Rank #2.

SailPoint Technologies Holdings, Inc. SAIL has an Earnings ESP of +66.67% and carries a Zacks Rank of 2. The company is set to report second-quarter 2020 results on Aug 6.

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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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