Micro Cap Gaming Company Doubles 2Q 2020 Revenue.

​Gaming is having a massive resurgence, thanks to Shelter at Home, Educate at Home, Work from Home, Everything from Home, et al. All of the gaming companies reported an increase in revenue in the 2nd quarter of 2020. However, the clear winner wasn’t the maker of Fortnite (partially owned by Tencent), Call of Duty (Activision) or Grand Theft Auto (Take-Two Interactive), although each of those put in a strong showing. As is often the case, it was the little widget that makes everything work – the headset. As you can see in the Stock Report Card below, Turtle Beach’s revenue almost doubled in the 2nd quarter of 2020 year over year, soaring to sales of $79.7 million.

Gaming Stock Report Card, including Call of Duty, GTA and Fortnite. Stock Report Card. (r) Natalie Pace 2020. All rights reserved.

​ 
Turtle Beach’s net income was equally impressive, coming in at $8.2 million, compared to $2.4 million in 2Q 2019. While many companies, including Tesla and Apple, have suspended their forward guidance on revenue and EPS, Turtle Beach projects sales of $185 million in the 2nd half of 2020, with net income per share of $0.50. If we assume that each quarter is equal (which is unlikely), then 3Q 2020 revenue should come in at $92.5 million. That would be almost double what the 3rd quarter of 2019 saw, at $46.7 million. The 3rd quarter of 2019 also saw a net loss of $3.1 million. So, the profitability could be noteworthy as well. The 3rd quarter results should be announced around Nov. 6, 2020.  
 
According to Juergen Stark, CEO of Turtle Beach, “We believe the demand is … being driven by greater overall engagement of existing gamers, as well as new and lapsed gamers joining the market as new gaming headset users. In addition, non-gamers are buying headsets for at-home work, school and socializing.”
 
Like many gaming companies, Turtle Beach’s seasonally strong quarter is typically Christmas. Last year’s 4th quarter revenue was $101.8 million, with $20.4 million in net income. This year, the strong quarter might be moved to the Back to School season (the 3rd quarter), when parents purchase headsets to be able to work from home, while also monitoring the schooling of their kids. If the 2nd half of the year projection of $185 million in sales is divided equally or weighted toward the coming 3rd quarter, then the 4th quarter 2020 results will not look impressive compared to 2019. So, this is something to monitor when the earnings report is released in November.
 
It’s rare to find the best performer on a Stock Report Card to also be the one with the lowest price/earnings ratio. Turtle Beach has already enjoyed a rally of almost five-fold since the COVID-crisis stock market rout in March.
 
In a recessionary year, it’s important to include macro trends in your buy/sell analysis. It’s clear that Turtle Beach stock can be vulnerable when stocks drop en masse. Between January and March of 2020, Turtle Beach lost more than half of its value.
 


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Turtle Beach's share price dropped to $4/share in March 2020. Chart by Money.MSN.com. (c) Microsoft 2020. Used with permission.

​So, if the current market rally peters out, it could drag even great little companies like Turtle Beach down with it. On the other hand, if you purchase and the stock shows continued strong performance, you might have to move swiftly to capture gains. In such a volatile market as we’ve seen in 2020, the right answer tends to be not all and not nothing. It requires a lot of babysitting to be on the right side of the trade in 2020.
 
 

If you're interested in learning how to pick hot stocks like Turtle Beach, in deepening your financial wisdom or in rebalancing your retirement plans, join me at our Oct. 3-5, 2020 Investor Educational Retreat. Click on the banner ad below for additional information on the Oct. 3-5, 2020 Online Financial Empowerment Retreat. Families receive a discount for attending together. Call 310-430-2397 or email [email protected] for to get rates. 

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​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 3rd edition of The ABCs of Money was released in 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

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