With 2 New Product Launches, Is Corsair Gaming Stock the Right Play?

CRSR has lost over 33% this year

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Corsair Gaming, Inc. (NASDAQ:CRSR) is a developer and manufacturer of computer components and peripherals, gaming gear, and other technology. On Sept. 13, the company unveiled the launch of two new optical-mechanical keyboards --the K60 PRO TKL and the K70 PRO OPX. These models will feature exclusive OPX keyswitches and aluminum frames, according to the release.

The stock has shed 33.3% this year, with pressure at the 140-day moving average rejecting the equity's breakout attempts for over a year now. The security dropped to a record low of $12.23 on July 14, though it looks to have found a floor near the $13.40 area since that bottom. Nonetheless, CRSR now offers appealing valuation metrics, trading at a forward price-earnings ratio of 9.88 and a price-sales ratio of 0.87.

crsr sept 15

However, CRSR is on course to report some drastic top- and bottom-line declines, with estimates predicting a 26.5% decrease in revenue and an 85.5% decrease in earnings for fiscal 2022. The company had previously shown signs of weakness when it reported a 2.2% drop in net income for fiscal 2021, despite generating 11.8% revenue growth.

Short sellers, meanwhile, have been hitting the exits, shedding 15.2% in the last two reporting periods. The 6.47 million shares sold short make up 16.9% of the stock's available float, however, which could create some additional tailwinds, should this pessimism continue to unwind. 

Moreover, Corsair Gaming holds a weak balance sheet with just $35.85 million in cash and $299.29 million in total debt, which could pose an issue if the business becomes unprofitable for extended periods. Fortunately, the company is expected to see a recovery for fiscal 2023, with estimates suggesting it will generate 20.7% revenue growth and 366.7% earnings growth. Consequently, Corsair stock has solid potential as a recovery play for 2023.

 

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