Corsair (CRSR) Is Looking… DECENT

Published February 9, 2022

Corsair (CRSR) was a top meme stock for parts of 2020 and 2021 but it’s fallen on hard times.

It’s 61% off the 2020 high at $51.37.

Why’s it down so much?

The popular view is that fewer people are at home playing PC games all day and night because of the pandemic waning.

That’s only partially true. Corsair has also been a victim of the supply chain mess, which has impacted most of the PC industry.

For example, lots of gamers are desperate to build new systems, but they can’t get their hands on Nvidia (NVDA) or AMD (AMD) graphics cards. For that reason, they have no need to buy a power supply, keyboard, or mouse from Corsair.

Corsair reported earning after the close yesterday, and the results and guidance were basically in-line with Wall Street expectations — even with a lot of headwinds.

So the company’s doing alright.

And things could get better if the PC supply chain improves, and oil prices fall. Oil has a huge impact on the cost of shipping, which hurts companies like Corsair.

Right now, analysts are forecasting earnings of $1.45 per share in 2022.

So at a price of about $20, the stock is trading at 14 times forward earnings.

But… we can’t count out misses.

So let’s assume Corsair earnings will be $1.25 a share a year. That puts it at 16 times earnings.

That’s not a bad valuation considering how much growth is slowing.

I’d like to get my paws on Corsair in the $17 to $19 range.

Because that means a very cheap valuation.

Plus, Corsair might get taken over by any number of companies ranging from Logitech (LOGI) to Razer to Dell to HP (HPQ). There’s maybe a 5-10% chance of a deal happening, but it is possible.

So keep an eye on this one. Corsair lost its meme stock power but it should still be on the radar.

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