Turtle Beach (TBCH) is expected to face near-term pressure as new China tariffs and the delayed release of Grand Theft Auto VI weigh on the company's outlook, Wedbush Securities said in a research note Tuesday.
Analysts, including Alicia Reese, said about half of Turtle Beach's manufacturing is based in China, exposing the company to significant cost risks given its heavy reliance on US sales. Unlike larger peers, Turtle Beach's smaller footprint makes it slower to adapt to shifting trade dynamics.
The firm also said competitors are better positioned to absorb tariff impacts by relocating production or leveraging international markets, while Turtle Beach may have to consider raising prices, an option that could risk demand in a discretionary category.
The GTA VI launch delay to May 2026 from the previously expected October 2025 will also postpone associated demand for peripherals such as headsets, representing another setback to growth this year, according to the note.
Turtle Beach is set to report Q1 results Thursday after market close.
Wedbush downgraded the stock to neutral from outperform and cut its price target to $9 from $21, citing reduced earnings forecasts and limited near-term catalysts.
Shares of Turtle Beach were down nearly 13% in recent Tuesday trading.
Price: 9.37, Change: -1.39, Percent Change: -12.92
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.