SWOT Analysis-Case Study 3

Turtle Beach Corporation

SWOT Analysis

Created by Dr. Sean

For the publicly-traded company you selected to evaluate for this course, perform a SWOT analysis using Microsoft Word. You must identify at least three strengths and weaknesses and identify at least 4 opportunities and 4 threats. You must provide reasoning for your strengths, weaknesses, opportunities, and threats.

Turtle Beach sells gaming headsets. They are based out of San Diego, California.

Strengths

1) leading console game headset maker (from 2nd quarter earnings transcript)

2) improved profitability and cash flows (from 2nd quarter earnings slide show)

3) improved Balance sheet due to reducing debt (from 2nd quarter earnings transcript)

3) partnerships with retailers (Best Buy, Gamestop, etc) and gaming companies (Microsoft, Electronic Arts, etc) (from 2nd quarter earnings slideshow)

4) growth of Battle Royale games (from 2nd quarter earnings transcript)

5) growth of eSports (from 2nd quarter earnings transcript)

Weaknesses

1) dependence on gaming headset sales

2) reliance on components from China

3) low market cap relative to expected growth rate could lead to hostile takeover(Yahoo data)

4) 40% of shares outstanding are sold short which is holding down the price (Yahoo data)

Opportunities

1) diversify into non-gaming headsets

2) expand into Asia specifically China which is the world’s largest gaming market (from 2nd quarter earnings transcript)

3) buy back stock to increase stock price and show management’s confidence in the company

4) expand into other gaming accessories such as keyboards

5) source components from countries other than China

Threats

1) competition from powerful PC headset makers such as Logitech

2) new products from existing competitors such as SteelSeries

3) probable decline in popularity of Fortnite (from 2nd quarter earnings transcript)

4) suppliers not able to keep up with demand for components (from 2nd quarter earnings transcript)

5) tariffs since they source components from China (from 2nd quarter earnings transcript)

References

Yahoo Finance. (2018). Retrieved September 23, 2018 from https://finance.yahoo.com/quote/HEAR/key-statistics?p=HEAR

Seeking Alpha. (2018). Turtle Beach Corporation (HEAR) CEO Juergen Stark on Q2 2018 Results - Earnings Call Transcript. Retrieved September 23, 2018 from https://seekingalpha.com/article/4195571-turtle-beach-corporation-hear-ceo-juergen-stark-q2-2018-results-earnings-call-transcript

Turtle Beach Corporation. (2018). Retrieved September 23, 1018 from https://www.turtlebeach.com/

Turtle Beach Second quarter earnings presentation. (2018). Retrieved September 23, 2018

https://s3.amazonaws.com/vtbroot/Corporate+Site/Presentation/HEAR_Q2_2018_Earnings-Presentation-Aug2018.pdf