Revenue and earnings were significantly lower y-o-y in 3QFY2019 ended Sept 30, 2019, due to expenses involved in the ROCCAT acquisition. Also, in 3QFY2018, TB’s revenue had a lift from Battle Royale which led to record new gaming headset users. TB’s five-year revenue and income CAGR are 5.6% and 11.1% respectively. Both operating cash flow (OCF) and free cash flow (FCF) turned positive in FY2018, indicating the company’s fundamentals are improving. Despite this, share price CAGR in FY2018 was –1.4%, indicating that TB is under-owned and undervalued.
The San Diego-based maker of gaming headsets is riding on the growing popularity of this activity. No longer is e-gaming seen as a peripheral hobby, it is now accepted as a mainstream sport.
SINGAPORE (Jan 23): Nasdaq-listed Turtle Beach Corp (TB) is a worldwide gaming accessory company and solutions provider specializing in headset and audio peripherals. The “addressable” market size for gaming headsets is US$2.7 billion ($3.6 billion) according to market intelligence reports. TB has a 46% market share, making it the market leader. TB’s headset and gaming accessories portfolio addresses every level of gamer, from entry-level gamers to professional e-sports gamers, with a wide range of prices. With the recent acquisition of ROCCAT in May 2019, TB’s portfolio has expanded from the traditional gaming headsets niche for multiple platforms to gaming keyboards, mice and other accessories focusing on the PC peripherals market. The acquisition will help to diversify earnings stream and lower the company’s risk profile.
