Why Corsair Gaming Stock May Be the Right Play for Value Investors

CRSR has bounced back over 20% since bottoming

Mar 25, 2022 at 11:16 AM
facebook twitter linkedin

On March 3, Corsair Gaming Inc (NASDAQ:CRSR) announced a partnership with 2K, a well-known publisher, bringing in-game RGB lighting integration for all CORSAIR iCUE RGB devices to Gearbox Software’s Tiny Tina’s Wonderlands.

The shares got caught up the broader-market freefall shortly after the announcement, hitting a two-year low of $17.45 on March 15. The stock saw a quick recovery, finding support at the $20.50 level once more, though pressure at the 90-day moving average has kept a lid on some of these gains during the past few sessions. 

crsr chart march 25

Despite its 36% year-over-year deficit, analysts have remained optimistic. Of the seven in coverage call CRSR a :strong buy." Plus, the 12-month average price target of $28.56 is a 36.3% premium to current levels. 

Short sellers, meanwhile, have been targeting the stock in droves, rising 31.4% in the last reporting period. The 11.59 million shares sold short make up a whopping 30.7% of the stock's available float, or over eight days' worth of pent-up buying power. 

Fundamentally speaking, Corsair Gaming stock offers a decent valuation for the level of growth it has generated and is expected to generate in the near future. CRSR trades at a forward price-earnings ratio of 13.87 and a price-sales ratio of 1.10, which are both great values for a business expected to grow revenues by 12.8% and earnings by 20.4% for 2023. Corsair Gaming’s fiscal 2021 revenues have also grown by 12% since fiscal 2020 and by 103% since fiscal 2018.

The gaming gear producer, however, has not maintained as strong of a growth rate on the bottom-line, experiencing a 2% decrease in net income between fiscal 2020 and fiscal 2021. CRSR also has a relatively weak balance sheet with $62.4 million in cash and $308.3 million in total debt. Nonetheless, Corsair Gaming stock presents itself as a solid option for value investors at its current price.


Special Offers from Schaeffer's Trading Partners