Baird has adjusted its outlook on Corsair Gaming (NASDAQ: CRSR), reducing the price target to $8.00 from the previous $10.00.
The firm has decided to maintain its Neutral rating on the stock. The adjustment comes in the wake of Corsair's recent acquisition of Fanatec, a move that Baird believes solidifies Corsair's standing in the sim racing peripherals market, making it a prominent hardware provider for popular video game genres.
The analyst from Baird acknowledges the potential growth drivers for Corsair, such as the introduction of new graphics chips and the release of blockbuster video games.
However, the firm has tempered its growth expectations for Corsair's components segment, citing a mixed market environment. This revised outlook has led to a lowered price target.
Corsair's strategic acquisition is seen as a positive step in diversifying and strengthening its product lineup. Fanatec, known for its sim racing gear, is expected to complement Corsair's existing offerings, thereby enhancing the company's competitive edge in the gaming hardware sector.
In other recent news, Corsair Gaming has been making strategic moves to diversify its product offerings. The company recently completed the acquisition of the Fanatec Sim Racing product line from Endor AG, a move that's expected to enhance Corsair's standing in the gaming peripherals market. In addition to the acquisition, Corsair has entered into an exclusive multi-year partnership with the Call of Duty franchise to provide gamers with a comprehensive gaming experience.
Corsair's financial performance for the second quarter of 2024 showed a decrease in net revenue to $261.3 million, down from $325.4 million in the same period last year. Despite the dip, the company's gamer and creator peripheral segment experienced a 20% year-over-year growth, credited to successful product launches. As part of its cost-saving measures, Corsair announced a reduction of approximately 100 employees and cuts in external expenses.
Corsair has revised its full-year 2024 outlook, expecting revenue between $1.25 billion and $1.35 billion, and adjusted EBITDA between $60 million and $75 million.
InvestingPro Insights
In light of Baird's revised outlook on Corsair Gaming (NASDAQ:CRSR), recent data from InvestingPro provides additional context that may be of interest to investors. With a market capitalization of $675.91 million and a negative P/E ratio of -17.11, Corsair's financials reflect a challenging period. The company's revenue has seen a slight decline of 0.78% over the last twelve months as of Q2 2024, with a more significant quarterly drop of 19.71% in Q2 2024. Despite these figures, Corsair's gross profit margin remains at 24.78%, indicating some resilience in profitability amidst revenue fluctuations.
InvestingPro Tips suggest that while analysts expect net income growth this year, they have also revised their earnings downwards for the upcoming period, anticipating a sales decline in the current year. Additionally, Corsair's stock price has experienced significant volatility, falling notably over the last three months and the past year. However, it's worth noting that the company's liquid assets exceed its short-term obligations, which could provide some financial stability.
For investors seeking more detailed analysis and additional InvestingPro Tips, there are 12 more tips available on the platform that could help in making informed decisions about Corsair Gaming. The current fair value estimations by analysts stand at $10, while InvestingPro's fair value assessment is slightly lower at $7.36, suggesting a potential undervaluation at the recent closing price of $6.48.
Overall, while Baird maintains a neutral stance, the InvestingPro data and tips provide a multifaceted view of Corsair's financial health and market position, which could be vital for stakeholders considering the company's prospects in the evolving gaming hardware market.
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