This company, primarily designs, sources, and sells gaming headset products, has been grouped into headset sector in personal items industry.
It seems that, based on the typical companies data, the demand, from gaming users and international market of headphones, for headset products has been weak and gradually declining in the past three years (down more than 7-10% annually).
The demand for headphone from US market has been solid but increased slowly driven by reducing price.
The typical companies’ gross margin is about 27-34%, which changed largely as a result of new products’ launching and promotion activities. With about average 30% SG&A as percentage of sales, the typical operating margin is about 0% in 2017.
The typical average stock price/sales ratio is about 0.7
It seems that the demand in US market for its gaming headsets of this company has been weak and generally declining in the three several years as indicated the fast decrease in demand for old-gen products and slower than expected growth in demand for new-gen headset.
The fiscal 2017 compared with 2016
Net sales decreased 14.3% primarily due to decrease in order from US retailers as a result of high inventory and cautious ordering. Market share increased.
The Fiscal 2016 compared with 2015
Net sales increased 7% primarily due to increase in sales of new products and less promotion activities from existing products.
The Fiscal 2015 compared with 2014
Net sales decreased 12.6% primarily due to decrease in sales of old-gen products and decrease in sales of international market offset by increase in new-gen products.
Its gross margin has increased significantly from around 27% in 2014 up to about 34% of 2017 due to products mix’s shifting to higher margin new-gen products and production and shipping cost saving. With its flat SG&A as percentage of sales (about 27%), its operating margin still increased to about 4% in 2017.
Stock performance
This stock currently has a stock price/sales ratio of 0.8. We think that its stock is being relatively undervalued considering that while weal demand as a result of weak sales of gaming console of new-gen the ratio is still too low compared with its peers.
