Corsair Gaming, Inc. (NASDAQ: CRSR)

Sector: Technology Industry: Computer Hardware CIK: 0001743759
Market Cap 506.55 Mn
P/B 0.84
P/E -14.36
P/S 0.35
ROIC (Qtr) -3.24
Div Yield % 0.00
Rev 1y % (Qtr) 13.66
Total Debt (Qtr) 122.87 Mn
Debt/Equity (Qtr) 0.20

About

Corsair Gaming, Inc. (CRSR) is a prominent player in the gaming and streaming industry, a sector that has witnessed significant evolution over the years. Today, gaming has become a mainstream form of entertainment, boasting an estimated 1.6 billion casual PC gamers and 245 million regular PC gamers worldwide. Corsair has established itself as a leading global provider and innovator of high-performance products for this burgeoning market. Corsair's main business activities revolve around the design and production of a diverse range of products....

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 67.51M provides robust 0.55x coverage of total debt 122.87M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 65.80M provide 10.76x coverage of short-term debt 6.12M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 704.95M provides 5.74x coverage of total debt 122.87M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 67.51M provides exceptional 49.02x coverage of minority interest expenses 1.38M, showing strong core operations.
  • Robust free cash flow of 55.88M exceeds capital expenditure of 11.62M by 4.81x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 67.51M barely covers its investment activities of (12.29M), with a coverage ratio of -5.49, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 65.80M against inventory of 314.45M, the 0.21 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Investment activities of (12.29M) provide weak support for R&D spending of 68.80M, which is -0.18x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 65.80M provide limited coverage of acquisition spending of (666000), which is -98.80x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 67.51M shows concerning coverage of stock compensation expenses of 31.31M, with a 2.16 ratio indicating potential earnings quality issues.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Computer Hardware
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ANET Arista Networks, Inc. 161.76 Bn 48.19 19.15 0.00 Bn
2 WDC Western Digital Corp 89.78 Bn 23.98 8.36 4.66 Bn
3 STX Seagate Technology Holdings plc 86.72 Bn 44.02 8.62 4.50 Bn
4 SNDK Sandisk Corp 82.62 Bn -79.37 9.25 0.60 Bn
5 DELL Dell Technologies Inc. 79.17 Bn 14.85 0.76 31.24 Bn
6 HPQ Hp Inc 23.90 Bn 5.91 0.38 9.67 Bn
7 PSTG Pure Storage, Inc. 20.95 Bn 160.70 6.01 0.23 Bn
8 SMCI Super Micro Computer, Inc. 18.39 Bn 23.20 0.87 4.78 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.44 2.06
EV to Cash from Ops. EV/CFO 7.76 3.18
EV to Debt EV to Debt 4.26 40.92
EV to EBIT EV/EBIT -20.85 0.75
EV to EBITDA EV/EBITDA 15.02 -4.30
EV to Free Cash Flow [EV/FCF] EV/FCF 9.37 -6.71
EV to Market Cap EV to Market Cap 1.03 10.14
EV to Revenue EV/Rev 0.36 51.74
Price to Book Value [P/B] P/B 0.84 7.89
Price to Earnings [P/E] P/E -14.36 5.08
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 8.02 1.24
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.08
Dividend per Basic Share Div per Share (Qtr) 0.00 0.28
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.46
Interest Coverage Int. cover (Qtr) -2.45 -104.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -11.45 -11.48
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 7.24 858.75
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 4.71
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 53.55 -121.75
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 398.26 -42.53
EBIT Growth (1y) % EBIT 1y % (Qtr) 43.13 -106.02
EBT Growth (1y) % EBT 1y % (Qtr) 39.66 -106.95
EPS Growth (1y) % EPS 1y % (Qtr) 63.33 -95.89
FCF Growth (1y) % FCF 1y % (Qtr) 107.08 667.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 20.95 34.00
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.21 0.80
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.05
Cash Ratio Cash Ratio (Qtr) 0.16 7.27
Current Ratio Curr Ratio (Qtr) 1.48 13.60
Debt to Equity Ratio Debt/Equity (Qtr) 0.20 -0.79
Interest Cover Ratio Int Coverage (Qtr) -2.45 -104.92
Times Interest Earned Times Interest Earned (Qtr) -2.45 -104.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 2.00 -629.06
EBIT Margin % EBIT Margin % (Qtr) -1.73 -682.80
EBT Margin % EBT Margin % (Qtr) -2.44 -686.71
Gross Margin % Gross Margin % (Qtr) 26.90 35.17
Net Profit Margin % Net Margin % (Qtr) -2.40 -691.59