UPDATE: B. Riley Starts Turtle Beach Corporation (HEAR) at Buy

(Updated - June 25, 2015 11:07 AM EDT)

B. Riley initiated coverage on Turtle Beach Corporation (NASDAQ: HEAR) with a Buy rating and a price target of $5.50. Analyst Eric Wold expects improved headset attach rates and strong ASPs in the coming years. He also thinks the company's HyperSound is an underappreciated technology and he noted management's efforts to improve the balance sheet and liquidity.

"In our opinion, Turtle Beach Corporation (HEAR) is well positioned with its leading market share to take advantage of a gaming console cycle that has 75-80% of unit sales still to come and is heading towards the key crossover point with the prior generation that should drive improving headset attach rates and stronger ASPs," said Wold.

"We also believe HyperSound is an underappreciated technology that has proven itself in the retail channel and has a solid value proposition within the healthcare channel targeting the hearing impaired," continued the analyst. "With HEAR shares off 80% since the January 2014 merger, key catalysts on the horizon for 2015 and management taking steps to improve the balance sheet and liquidity, we are initiating coverage with a Buy rating and price target of $5.50."

Wold added, "With unit sales for the current gaming console cycle (Xbox One and PS4) running 70% higher than the prior cycle (Xbox 360 and PS3) at the same point post-launch and an estimated 75-80% of the projected cumulative unit sales remaining to come over the next 3-4 years according to DFC Intelligence, we believe that Turtle Beach remains well positioned to take advantage of associated headset demand given its leading market share."

For an analyst ratings summary and ratings history on Turtle Beach Corporation click here. For more ratings news on Turtle Beach Corporation click here.

Shares of Turtle Beach Corporation closed at $2.80 yesterday.

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