Australia markets closed
  • ALL ORDS

    6,696.50
    +29.00 (+0.43%)
     
  • AUD/USD

    0.6483
    +0.0025 (+0.39%)
     
  • ASX 200

    6,496.20
    +26.80 (+0.41%)
     
  • OIL

    77.46
    +0.75 (+0.98%)
     
  • GOLD

    1,642.00
    +8.60 (+0.53%)
     
  • BTC-AUD

    31,080.03
    +1,189.78 (+3.98%)
     
  • CMC Crypto 200

    459.80
    +26.70 (+6.17%)
     

The Corsair Gaming, Inc. (NASDAQ:CRSR) Analysts Have Been Trimming Their Sales Forecasts

·3-min read

Market forces rained on the parade of Corsair Gaming, Inc. (NASDAQ:CRSR) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Investors however, have been notably more optimistic about Corsair Gaming recently, with the stock price up an impressive 16% to US$16.34 in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

Following the downgrade, the consensus from eight analysts covering Corsair Gaming is for revenues of US$1.4b in 2022, implying a perceptible 7.7% decline in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$0.72 per share this year. Before this latest update, the analysts had been forecasting revenues of US$1.6b and earnings per share (EPS) of US$0.82 in 2022. Indeed, we can see that the analysts are a lot more bearish about Corsair Gaming's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Corsair Gaming

earnings-and-revenue-growth
earnings-and-revenue-growth

The consensus price target fell 11% to US$17.67, with the weaker earnings outlook clearly leading analyst valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Corsair Gaming, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$13.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Corsair Gaming shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Corsair Gaming's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 15% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 21% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.6% annually for the foreseeable future. It's pretty clear that Corsair Gaming's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Corsair Gaming's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Corsair Gaming going forwards.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Corsair Gaming analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here