Turtle Beach (HEAR) is set for "share gains and profitable growth" as it enters a new gaming accessory cycle, Oppenheimer said in a note Friday.
The company posted Q2 revenue of $76.5 million and adjusted earnings before interest, taxes, depreciation and amortization of $3 million, versus the consensus of $70.7 million and $1.2 million, respectively, according to the note.
Turtle's Q2 reflects "the start of a product replacement cycle," coinciding with the company's product releases that included wireless headsets, controllers and PC peripherals, Oppenheimer said.
Additional product launches are expected in Q3 that will likely help Turtle reach its mid-to-high 30s target gross margin range, the investment firm added.
Turtle also demonstrated confidence in its trajectory with a $15.2 million share repurchase, Oppenheimer said.
Meanwhile, Turtle is advancing its PDP integration ahead of schedule, with positive feedback from retail customers and industry partners, and is on track to achieve synergies of $10 million to $12 million by next year, Oppenheimer said.
Oppenheimer upgraded Turtle's stock to outperform from perform, with a price target of $17.
Shares of the company jumped nearly 17% in recent trading.
Price: 14.94, Change: +2.12, Percent Change: +16.54
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