Does Corsair Gaming (NASDAQ:CRSR) Have A Healthy Balance Sheet?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. As with many other companies Corsair Gaming, Inc. (NASDAQ:CRSR) makes use of debt. But the more important question is: how much risk is that debt creating?

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When Is Debt Dangerous?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

How Much Debt Does Corsair Gaming Carry?

As you can see below, Corsair Gaming had US$148.7m of debt at March 2025, down from US$183.3m a year prior. However, because it has a cash reserve of US$99.8m, its net debt is less, at about US$48.8m.

How Healthy Is Corsair Gaming's Balance Sheet?

According to the last reported balance sheet, Corsair Gaming had liabilities of US$417.2m due within 12 months, and liabilities of US$199.0m due beyond 12 months. Offsetting these obligations, it had cash of US$99.8m as well as receivables valued at US$219.2m due within 12 months. So its liabilities total US$297.1m more than the combination of its cash and short-term receivables.

While this might seem like a lot, it is not so bad since Corsair Gaming has a market capitalization of US$982.0m, and so it could probably strengthen its balance sheet by raising capital if it needed to. But it's clear that we should definitely closely examine whether it can manage its debt without dilution. The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine Corsair Gaming's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

See our latest analysis for Corsair Gaming

Over 12 months, Corsair Gaming made a loss at the EBIT level, and saw its revenue drop to US$1.3b, which is a fall of 6.5%. We would much prefer see growth.

Caveat Emptor

Importantly, Corsair Gaming had an earnings before interest and tax (EBIT) loss over the last year. To be specific the EBIT loss came in at US$42m. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. We would feel better if it turned its trailing twelve month loss of US$97m into a profit. So in short it's a really risky stock. When we look at a riskier company, we like to check how their profits (or losses) are trending over time. Today, we're providing readers this interactive graph showing how Corsair Gaming's profit, revenue, and operating cashflow have changed over the last few years.

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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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.