Corsair (CRSR) 🎮 Research
Corsair (CRSR) 🎮 Research
+147% Mentions Week-on-week
Another day, another stock identified. This time it’s Corsair (Ticker: CRSR).
Corsair is an American computer peripherals and hardware company headquartered in Fremont, California.
The company currently has two clear product streams, Gaming peripherals (mice, Memory chips, rad glowy keyboards etc) and streaming software/products.
It is this second, streaming revenue line that gets me really excited about this stock.
Corsair has been offering streaming peripherals for youtubers/video for a while now (through Elgato), and has recently expanded by purchasing Visuals by Impulse for an undisclosed amount.
Gaming streaming is already a HUGE market, which has only been taken up even more by COVID-19 lockdown meaning people have been turning more towards watching pro players playing video games (remember how much time you spent watching COD:Warzone videos this year?). Youtube for example estimate 40 MILLION gaming channels by December this year.
Corsair’s established name and extended venture into streaming means they have a high chance of gaining a market monopoly on streaming software/peripherals over the next few years.
Furthermore, while Logitech (LOGN) are probably the nearest competitor, they are nowhere near as heavily involved in streaming as Corsair, and even so, have triple the market cap of Corsair, in a massive market. This means Corsair only needs to pick up a few percentage points of market share to really get going.
Pent-up demand
Corsair has beaten analyst expectations when it comes to earnings on a few occasions now, and has shown strong growth on the money-in department, growing revenues from $1.10bn to $1.70bn (+55.16%) while improving net income a loss of $8.39m to a gain of $103.22m. That’s while taking into account the fact that there’s a global semiconductor shortage currently, meaning revenues & earning could have shot up even higher.
Valuation & Finances
simplywallst.com do an automated valuation for a stock (it’s actually quite in-depth for what it’s worth), which estimates the company is currently trading at 40% compared to its underlying value.
Balance sheet wise, the company is in a good place currently, having reduced its debt-to-equity ratio (how much the company owes, vs how much it owns, the lower the better) from 2.05 to 0.73.
Possible Downsides
Corsair has a high price to book ratio (total market capitalisation of the stock vs it’s ‘book value’, the lower the better) compared to the overall tech sector. Corsair's 8.14 vs The tech sector's 4.07.
Corsair Gaming's lock-up period expires on Monday, March 22nd which will drop the stock an average of 1%-3%, long term however this is good as it will reduce volatility of the stock.
Summary
Corsair focussing on a booming streamer market, along with pent-up demand due to semiconductor shortage get me really excited about this stock. Current price point ($40.2 at time of writing) is low for what it should be, and if momentum truly picks up with the stock this could go far.
As with always, please do your own research before investing.
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