The annual results for Corsair Gaming, Inc. (NASDAQ:CRSR) were released last week, making it a good time to revisit its performance. Corsair Gaming reported US$1.7b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.14 beat expectations, being 3.3% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the eight analysts covering Corsair Gaming are now predicting revenues of US$1.76b in 2021. If met, this would reflect an okay 3.3% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to reduce 9.2% to US$1.09 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.71b and earnings per share (EPS) of US$1.04 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
It will come as no surprise to learn that the analysts have increased their price target for Corsair Gaming 18% to US$48.33on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Corsair Gaming, with the most bullish analyst valuing it at US$55.00 and the most bearish at US$33.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Corsair Gaming's revenue growth is expected to slow, with forecast 3.3% increase next year well below the historical 20%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Corsair Gaming.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Corsair Gaming following these results. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Corsair Gaming. Long-term earnings power is much more important than next year's profits. We have forecasts for Corsair Gaming going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Corsair Gaming that you should be aware of.
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