Turtle Beach Draws More Call Traders After Bull Note

The analyst expects more growth for the gaming headset maker

Aug 2, 2018 at 3:08 PM
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Wedbush can't get enough of Turtle Beach Corp (NASDAQ:HEAR). The brokerage firm raised its price target on HEAR stock again, this time to $31 from $20, pointing to potential growth opportunity for the gaming headset maker on rising popularity in battle royale games like Fortnite, as well as expansion into the Chinese market.

In reaction, HEAR stock has jumped 9.4% to trade at $30.44, fresh off a four-year high of $31.43. The equity is no stranger to big upside moves, however, as it currently boasts a 1,608% year-to-date return. More recently, the shares have surged 66% since bouncing off their 30-day moving average in late June.

hear stock daily chart aug 2

Against this backdrop, it's not surprising to see most sentiment stacked up on the bullish side. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought 2.01 calls for each put over the past 10 trading sessions.

Today, 4,774 calls have traded on HEAR -- three times what's typically seen and volume pacing in the 100th annual percentile -- compared to fewer than 1,700 puts. One trader may be rolling their August 30 calls down to the 25 strike, or potentially initiating a long call spread in the front-month series.

Meanwhile, all three covering brokerages maintain a "strong buy" rating. However, there's certainly room for more analysts to lift their price targets, considering the average 12-month price target of $25.67 is a discount to current trading levels. Even Wedbush's new target is in line with HEAR stock's price.

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