Turtle Beach Corporation (NASDAQ:TBCH) Stocks Pounded By 31% But Not Lagging Industry On Growth Or Pricing

Unfortunately for some shareholders, the Turtle Beach Corporation (NASDAQ:TBCH) share price has dived 31% in the last thirty days, prolonging recent pain. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 31% in that time.

In spite of the heavy fall in price, it's still not a stretch to say that Turtle Beach's price-to-sales (or "P/S") ratio of 0.6x right now seems quite "middle-of-the-road" compared to the Tech industry in the United States, where the median P/S ratio is around 0.9x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.

We've discovered 2 warning signs about Turtle Beach. View them for free.

See our latest analysis for Turtle Beach

What Does Turtle Beach's Recent Performance Look Like?

Turtle Beach certainly has been doing a good job lately as it's been growing revenue more than most other companies. It might be that many expect the strong revenue performance to wane, which has kept the P/S ratio from rising. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's not quite in favour.

Want the full picture on analyst estimates for the company? Then our free report on Turtle Beach will help you uncover what's on the horizon.

How Is Turtle Beach's Revenue Growth Trending?

There's an inherent assumption that a company should be matching the industry for P/S ratios like Turtle Beach's to be considered reasonable.

Taking a look back first, we see that the company grew revenue by an impressive 44% last year. However, the latest three year period hasn't been as great in aggregate as it didn't manage to provide any growth at all. Accordingly, shareholders probably wouldn't have been overly satisfied with the unstable medium-term growth rates.

Turning to the outlook, the next three years should generate growth of 8.0% per annum as estimated by the five analysts watching the company. Meanwhile, the rest of the industry is forecast to expand by 6.4% each year, which is not materially different.

With this in mind, it makes sense that Turtle Beach's P/S is closely matching its industry peers. Apparently shareholders are comfortable to simply hold on while the company is keeping a low profile.

The Bottom Line On Turtle Beach's P/S

Turtle Beach's plummeting stock price has brought its P/S back to a similar region as the rest of the industry. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

Our look at Turtle Beach's revenue growth estimates show that its P/S is about what we expect, as both metrics follow closely with the industry averages. At this stage investors feel the potential for an improvement or deterioration in revenue isn't great enough to push P/S in a higher or lower direction. Unless these conditions change, they will continue to support the share price at these levels.

You need to take note of risks, for example - Turtle Beach has 2 warning signs (and 1 which is potentially serious) we think you should know about.

It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.