Stock Analysis

Corsair Gaming, Inc. (NASDAQ:CRSR) Analysts Just Cut Their EPS Forecasts Substantially

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Market forces rained on the parade of Corsair Gaming, Inc. (NASDAQ:CRSR) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the latest downgrade, Corsair Gaming's eight analysts currently expect revenues in 2022 to be US$1.7b, approximately in line with the last 12 months. Statutory earnings per share are supposed to nosedive 30% to US$0.36 in the same period. Before this latest update, the analysts had been forecasting revenues of US$1.9b and earnings per share (EPS) of US$0.90 in 2022. Indeed, we can see that the analysts are a lot more bearish about Corsair Gaming's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Corsair Gaming

NasdaqGS:CRSR Earnings and Revenue Growth May 10th 2022

The consensus price target fell 20% to US$21.11, with the weaker earnings outlook clearly leading analyst valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Corsair Gaming, with the most bullish analyst valuing it at US$28.00 and the most bearish at US$15.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 2.7% by the end of 2022. This indicates a significant reduction from annual growth of 27% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Corsair Gaming is expected to lag 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. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Corsair Gaming.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Corsair Gaming analysts - going out to 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Valuation is complex, but we're helping make it simple.

Find out whether Corsair Gaming is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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