Turtle Beach Corp (NASDAQ: TBCH)

Sector: Technology Industry: Consumer Electronics CIK: 0001493761
Market Cap 260.96 Mn
P/B 2.36
P/E 14.29
P/S 0.75
ROIC (Qtr) 13.83
Div Yield % 0.00
Rev 1y % (Qtr) -14.74
Total Debt (Qtr) 90.46 Mn
Debt/Equity (Qtr) 0.82

About

Turtle Beach Corporation, also known as HEAR on the stock market, is a dominant player in the gaming accessories industry, with a rich history of nearly five decades in audio technology. The company is renowned for its mission to provide gamers with an unparalleled gaming experience through high-quality, high-performance gaming accessories. Turtle Beach's operations span the global gaming industry, estimated to be worth $190 billion. Their product range is designed to cater to a diverse group of gamers, from beginners to professionals, and are...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 36.44M provides robust 0.40x coverage of total debt 90.46M, indicating excellent debt servicing capability and financial flexibility.
  • Robust free cash flow of 33.74M exceeds capital expenditure of 2.69M by 12.54x, indicating strong organic growth funding capability.
  • Tangible assets of 191.43M provide robust 8.48x coverage of other current liabilities 22.58M, indicating strong asset backing.
  • Cash reserves of 12.26M provide ample 4.87x coverage of acquisition spending 2.52M, enabling strategic growth opportunities.
  • Operating cash flow of 36.44M fully covers other non-current liabilities 7.60M by 4.80x, showing strong long-term stability.

Bear case

  • Operating cash flow of 36.44M barely covers its investment activities of (176000), with a coverage ratio of -207.02, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 12.26M against inventory of 94.96M, the 0.13 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Investment activities of (176000) provide weak support for R&D spending of 17.13M, which is -0.01x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 36.44M provides minimal -328.24x coverage of tax expenses of (111000), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of 28.91M show weak coverage of depreciation charges of 12.60M, with a 2.29 ratio indicating high capital intensity and potential reinvestment needs.

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Consumer Electronics
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AAPL Apple Inc. 3,878.78 Bn 34.63 9.32 98.66 Bn
2 SONY Sony Group Corp 150.52 Bn 19.23 1.76 13.01 Bn
3 LPL LG Display Co., Ltd. 2.14 Bn -16.47 0.11 9.69 Bn
4 SONO Sonos Inc 1.99 Bn -32.61 1.38 0.05 Bn
5 ZEPP Zepp Health Corp 0.42 Bn -6.30 1.78 0.21 Bn
6 TBCH Turtle Beach Corp 0.26 Bn 14.29 0.75 0.09 Bn
7 VUZI Vuzix Corp 0.26 Bn -6.90 48.49 0.00 Bn
8 GPRO GoPro, Inc. 0.23 Bn -1.92 0.36 0.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.11 1.60
EV to Cash from Ops. EV/CFO 8.49 12.05
EV to Debt EV to Debt 3.42 190.88
EV to EBIT EV/EBIT 10.70 -26.74
EV to EBITDA EV/EBITDA 7.26 5.01
EV to Free Cash Flow [EV/FCF] EV/FCF 9.16 91.29
EV to Market Cap EV to Market Cap 1.19 4.51
EV to Revenue EV/Rev 0.89 3.74
Price to Book Value [P/B] P/B 2.36 4.74
Price to Earnings [P/E] P/E 14.29 -22.81
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -85.09
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 1.06
Dividend per Basic Share Div per Share (Qtr) 0.00 0.06
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.86
Interest Coverage Int. cover (Qtr) 2.69 -21.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 25.81 -25,917.65
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -11.20 24.14
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -3.99
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 236.12 -460.09
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 199.42 -135.96
EBIT Growth (1y) % EBIT 1y % (Qtr) 558.67 574.68
EBT Growth (1y) % EBT 1y % (Qtr) 2,022.67 39.32
EPS Growth (1y) % EPS 1y % (Qtr) 173.53 -8.06
FCF Growth (1y) % FCF 1y % (Qtr) 387.63 -2,232.41
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 17.68 60.40
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.25 0.77
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.11 0.81
Current Ratio Curr Ratio (Qtr) 1.60 3.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.82 3.74
Interest Cover Ratio Int Coverage (Qtr) 2.69 -21.34
Times Interest Earned Times Interest Earned (Qtr) 2.69 -21.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.00 -156.08
EBIT Margin % EBIT Margin % (Qtr) 8.33 393.83
EBT Margin % EBT Margin % (Qtr) 5.23 -168.19
Gross Margin % Gross Margin % (Qtr) 36.20 19.36
Net Profit Margin % Net Margin % (Qtr) 5.30 -169.48