Skullcandy Inc SKUL with an Outperform rating on Wednesday, seeing near 100 percent upside. A 12-to 18-month price target of $8 was set on shares.
Oppenheimer began coverage on
The stock closed at $4.78 on Tuesday.
Sean McGowan commented, "We are initiating coverage of Skullcandy
(SKUL) with an Outperform rating and a 12- to 18-month price target of
$8. Sales and profits in 2015 have been negatively affected by adverse
currency moves, as well as by changes to its international distribution
Additionally, McGowan noted that retail promotional activity in the
headphone category has been intense this holiday season. "We believe
these factors are overshadowing very strong constant currency sales
growth and market share gains. These factors may continue to weigh on
the shares into 2016, but we expect that by this time next year," he
"SKUL's results will show better momentum. We expect the stock to trade
up to at least $8 12-18 months from now, and believe it will Outperform
the broader markets."
The company was founded in 2003 by Rick Alden, and focuses on audio
products (music/media headsets and headphones, Bluetooth speakers and
video game headsets) for music consumers and hard core video gamers.
Skullcandy's last IPO was in July 2011 at $20 per share; the stock has not seen that price since.
Sales of Skullcandy reached nearly $300 million in 2012. In 2013, the
significant setbacks were experienced, with its sales dropping 29
percent. Shares are now below their 2013-era closing low of $5.11.