Schaeffer's Top Stock Picks for '25

Gaming Stock Continues Climb as Short Sellers Retreat

HEAR is trading up more than 80% from its recent lows

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Turtle Beach Corporation (NASDAQ:HEAR) is one of the world’s leading gaming accessory providers. Turtle Beach’s ROCCAT brand designs PC gaming products and creates keyboards, mice, headsets, mousepads, and other PC accessories. HEAR's Neat Microphones brand also creates USB and analog microphones for gamers, streamers, and professionals in the technology and design industry. Heading into Thursday, HEAR is trading flat at $30.39.

On Sept. 22 Turtle Beach Corporation launched a line-up of all-new custom, limited-edition gaming gear in collaboration with Dr Disrespect. HEAR is creating limited edition gaming headsets, mouses, keyboards, and mousepads as part of the collaboration.

Looking to earnings history, Turtle Beach stock has outperformed expectations on all four of its most recent reports, starting with Q3 of 2021, where HEAR beat estimates by a solid margin of $0.82 and reported an EPS of $1.05. For Q4 of 2020, Turtle Beach's EPS dropped to $0.84 and still beat expectations by a slight margin of $0.06. For Q1 of 2021, HEAR's EPS dropped again down to $0.52 per share and still beat estimates by a margin of $0.06. For Q2 of 2021, Turtle Beach reported an EPS of $0.14 and beat expectations by a margin of $0.24. The company's next earnings is slated for early November.

Turtle Beach stock has increased about 71% year-over-year and HEAR is trading up 86% since bottoming at a 52-week low of $16.26 back in November of 2020. Additionally, shares of HEAR have grown 41% year-to-date, but Turtle Beach stock is currently down 21% after reaching up to a record high of $38.70 in mid-June.

Turtle Beach stock currently trades at an attractive price-earnings ratio of 12.08. The company also has a solid balance sheet with $56.2 million in cash and $5.6 million in total debt. Overall, Turtle Beach stock continues to be a strong value investment, especially considering HEAR's forward price earnings ratio of 16.21.

Lastly, short interest has been declining, down 6.5% during the past two reporting periods. This accounts for 11.7% of the stock's total available float, and would take short sellers an entire week to cover.

 
 

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