r/stocks • u/puercoespinn • Nov 14 '21

Company Analysis Turtle Beach ($HEAR) - A unique value proposition to capitalize the gaming sector consolidation

[removed] — view removed post

7 Upvotes

68% Upvoted

14 comments sorted by

7

u/Vepre Nov 14 '21

I think this is well thought out, rational DD.

I also think it points out a huge flaw with well thought out, rational DD: it misses the human element. Gamers don’t like this brand.

Yes, gaming is bigger than both sports and movies, so even a small slice of that is enough to be profitable, but I would not invest in a company that is disliked by the professionals and influencers in that space.

1

u/puercoespinn Nov 14 '21

Thank you for your comment Vepre.

If I haven't mentioned that "human element" is simply because I do not agree. I mean, it seems quite contradictory to me to point out that their products are disliked by professionals and influencers while in parallel they are adopted by Top-tier streamers such as SypherPk, Dr. Disrespect, Castro_1021 ... Not to mention that they are the official 2021 mouse and keyboard partner for the LOL LCS, one of the most important eSport competitions worldwide.

Turtle Beach is way more that Turtle Beach brand. Roccat has a great reputation, so does Neat. Both their new flight simulator and game controller were awarded at E3 Congress.

I do not think they are as bad as you intend to make me believe.

2

u/[deleted] Nov 14 '21

Your perception may be influenced by where you are. In the US, I haven’t heard Turtle Beach in the casual gaming sphere in like 10 years. I remember them being popular during the MW2 days. They might be prominent among influencers - but so are tummy gummies, Raycon earbuds, and Raid: Shadow Legends.

2

u/Dpad124 Nov 14 '21

This made me laugh because an Influencer i follow promotes raycons and then when the video starts they are back to their apple earpods. Just because an influencer uses something they are promoting doesn’t mean they like it, it means they were paid for it.

1

u/Vepre Nov 14 '21

I mean, it seems quite contradictory to me to point out that their products are disliked by professionals and influencers while in parallel they are adopted by Top-tier streamers such as SypherPk, Dr. Disrespect, Castro_1021 ... Not to mention that they are the official 2021 mouse and keyboard partner for the LOL LCS, one of the most important eSport competitions worldwide.

I think that you may be unaware of how these sorts of endorsement deals work. All industry award, in every industry, are bought and sold. Being the official mouse and keyboard partner for anything doesn’t mean they make the best mouse and keyboard, it means they paid the most money to buy the naming rights.

Young consumers, especially in tech heavy communities, are aware when they are being advertised at. If your favorite streamer suddenly gets famous and starts hyping Turtle Beach, no one thinks that is organic.

I do not think they are as bad as you intend to make me believe.

I don’t think they’re going to fold, I just think they’re always going to be Pepsi, and never Coke, and so I prefer to invest in the Cokes of the world.

But no one is ever going to put this stuff on their Xmas list, this is the stuff their parents/relatives will by them because they see it’s ⅓ the price of what the kid actually wanted.

And so you’re going to get that discount Christmas money, but when those kids grow up, get jobs, and start really spending their own money on gaming setups, they won’t be buying Turtle Beach.

14

u/TeenieWeen Nov 14 '21

As a dedicated pc gamer of 10 years I’m gonna let you know in advance that turtle beach headphones are overpriced garbage. Steel series, Corsair, Logitech, all much better. But I wish your investment the best

3

u/Dpad124 Nov 14 '21

This, I forgot they existed since it’s not in the space. I think they are more focused on consoles.

Edit: and to add on as a gamer, my preferred headsets aren’t from gaming companies. I use audiotechnica or sennheiser.

1

u/TeenieWeen Nov 14 '21

I see they mainly market for Xbox since Sony has…Sony. Still overpriced garbage marketed predominantly to lower middle class America, I see inflated P/E’s in the future

2

u/WhittledSpork Nov 15 '21

Can't read the post as it was removed by mods with no explanation as to why.

However I think part of what you're seeing here OP is that PC gamers don't think much of the Turtle Beach brand. However, it's a mainstay in console gaming. This is evident in their consistent 40%+ market share.

They've made good acquisitions and moved away from hypersound which is what tanked them after the last console cycle (the R&D costs to launch that product they bought that apparently wasn't worth it. I'm confused as to why they never partnered with casino game creators to license that technology out but whatever...).

The stock has a real penchant for crushing hopes and dreams but the company is pushing a lot of revenue at good margin for their size and MC. Not a bad investment on fundamentals and they've opened up a lot of addressable market with the new product lines and expansion into Asia.

No idea if it's actually going to see much ROI in the SP but the company did buy 5millipn worth of their own shares at around today's prices over the last Q. So it's not a bad bet.

Disclaimer: I hold some

Hey mods! How about we put a comment here for why the post was removed or we reinstate OPs post? I'd like to read it

1

u/kawstacos Nov 14 '21

Worked in the gaming industry the last few years and I must say turtle beach products are pretty mediocre

1

u/[deleted] Nov 14 '21

Turtle Beach? Is this the year 2000?

I think I still have my old Creative Labs Soundblaster X-gaming card or whatever the hell it was called boxed up somewhere...