Turtle Beach Corporation (NASDAQ:HEAR) stock has become an attractive way to play the resurgence of interest in video and multi-player online games along with the headsets that gamers use so the company should see steady growth in the months ahead, Oppenheimer Equity Research said.
Analysts Andrew Uerkwitz and Martin Yang said the Turtle Beach numbers came in better-than-expected with third quarter revenue alone forecast to range from $73 million to $74 million, compared to the prior guidance of around $65 million.
"Continued strong demand related to battle royale games was cited as the primary driver of the quarterly beat. The battle royale genre, in our view, is but one example of types of video games that make high-quality headsets essential," they said in a research note to clients. They reiterated an Outperform rating for the stock with a price target of $35.
Turtle Beach stock jumped almost 5% to $18.89 in early trade on Friday.
The stock had risen 4.11% to $18.75 in the premarket, having closed on Thursday up by 4.71% at $18.01.
"We view Turtle Beach as an attractive way to play two investment ideas: first, the resurgence in video games and the accompanying rise in multiplayer online games, and second, HyperSound, a "directed audio" technology on the cusp of commercialization," the analysts concluded.
"More and more games are being built specifically to play with multiplayer and more important "squad/team" modes. Having a headset with microphone offers gamers several advantages, the least of which is a better audio and social experience compared to playing without a headset," the note added.
The headwinds for the stock would be weak demand for video game accessories, soft retail foot traffic hurting sales, and adverse currency translations, they said.
Turtle Beach is a gaming headset and audio accessory company. It is based in San Diego, California.
Reporting by Rene Pastor, contractable on [email protected]