Assessing Turtle Beach Corporation’s (NASDAQ:HEAR) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Turtle Beach is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its consumer durables industry peers. Check out our latest analysis for Turtle Beach

How HEAR fared against its long-term earnings performance and its industry

To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to assess many different companies on a similar basis, using the most relevant data points. For Turtle Beach, its most recent earnings (trailing twelve month) is -$5.3M, which compared to the previous year’s level, has become less negative. Given that these values may be relatively short-term, I have computed an annualized five-year figure for Turtle Beach’s earnings, which stands at -$37.4M. This means despite the fact that net income is negative, it has become less negative over the years.

Additionally, we can analyze Turtle Beach’s loss by looking at what has been happening in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over the past couple of years has been negative at -4.18%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Looking at growth from a sector-level, the US consumer durables industry has been growing its average earnings by double-digit 11.28% in the past year, and 14.75% over the previous five years. This suggests that, while Turtle Beach is currently running a loss, it may have been aided by industry tailwinds, moving earnings towards to right direction.

What does this mean?

Turtle Beach’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most valuable step is to assess company-specific issues Turtle Beach may be facing and whether management guidance has regularly been met in the past. You should continue to research Turtle Beach to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for HEAR’s future growth? Take a look at our free research report of analyst consensus for HEAR’s outlook.

2. Financial Health: Is HEAR’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.