The future of gaming that rekt us all in 2021 is the future of gaming, again.
The upgrade cycle is upon us, as indicated by the Logitech report last night, which noted gaming sales were unexpectedly “near pandemic highs.” LOGI's gaming revenue was $467mm vs. est of $393mm. Adding to that is the NVDA RTX 5070 release, which if truly as powerful as a 4090 will drive a GPU upgrade cycle when widely released in Feb.
Google trends results show search interest for “Gaming PC” and “Corsair” were at their highest in years this holiday season.
https://preview.redd.it/zs9dsofo2zfe1.png?width=624&format=png&auto=webp&s=0d17a95c4aafb8d4aafcb3ed8806edc7a7113509
In Q3, Corsair lowered EBITDA guidance by 30%, which followed a Q2 reduction in revenue guidance by 15%. This was met with analyst downgrades, which currently have an avg target price of $8.67. Expectations are in the gutter.
This is also supported by valuation, which is trawling the lows with FWD P/E at 11.3x. This is just half of the SPX’s 20x, and well below the levels we saw from this co in the past.
https://preview.redd.it/m61rfdzp2zfe1.png?width=624&format=png&auto=webp&s=fde9defac77a4ac760cfab5ab07d97c757a633b6
Dislcosure: I own underlying and Feb/Mar calls. NFA DYOR.
https://preview.redd.it/66zr6nbr2zfe1.png?width=738&format=png&auto=webp&s=205a14b3e594364b28f098113c9672f095dd1e8f
TLDR: The company sandbagged guidance only to have holiday sales crush forecasts. Combined with record low expectations and a potential upgrade cycle underway, Corsair will almost certainly beat when they report on 2/12.