With 2 new product launches, is Corsair Gaming Stock the right game?
CRSR launches two new mechanical keyboards
Corsair Gaming, Inc. (NASDAQ: CRSR) is a developer and manufacturer of computer components and peripherals, gaming hardware and other technologies. On September 13, the company unveiled the launch of two new optical-mechanical keyboards, the K60 PRO TKL and K70 PRO OPX. These models will feature exclusive OPX key switches and aluminum frames, according to the release.
The stock has lost 33.3% this year, with pressure on the 140-day moving average dismissing attempts to break the stock for more than a year now. The stock fell to an all-time high of $12.23 on July 14, although it appears to have bottomed near the $13.40 area since that low. Nonetheless, CRSR now offers attractive valuation metrics, trading at a forward price-to-earnings ratio of 9.88 and a price-to-sell ratio of 0.87.
However, CRSR is on track to report drastic declines in revenue and earnings, with estimates calling for a 26.5% drop in revenue and an 85.5% drop in profit for fiscal 2022. The company previously showed signs of weakness when it reported a 2.2% drop in net profit for fiscal year 2021, despite revenue growth of 11.8%.
Short sellers, meanwhile, hit the exits, losing 15.2% over the past two reporting periods. The 6.47 million shares sold short, however, represent 16.9% of the free float of the action, which could create additional tailwinds, if this pessimism continues to dissipate.
Additionally, Corsair Gaming holds a weak balance sheet with just $35.85 million in cash and $299.29 million in total debt, which could pose a problem if the company becomes unprofitable for long periods of time. Fortunately, the company is expected to experience a recovery for fiscal 2023, with estimates suggesting it will deliver 20.7% revenue growth and 366.7% profit growth. Therefore, Corsair stock has strong potential as a takeover play for 2023.