Corsair Share Price Nears Record High As Wall Street Analysts Tout Extreme Optimism

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Computer peripherals and hardware manufacturer Corsair Gaming, Inc is having a great run on the stock market today as major Wall Street banks initiate coverage on the company's stock. Today's coverage follows a buy rating from investment bank Goldman Sachs whose analyst Rod Halls investor note for Corsair surfaced yesterday. In the note, Hall set a $32/share price target for Corsair and stated his optimism for the company's future due to the uptick in demand for work-from-home products and gadgets this year in the aftermath of pandemic-induced global lockdowns.

Corsair Gaming's Share Price Soars As Wall Street Analysts Express Optimism About Company's Future

In addition to touting the impact of the post-pandemic economic environment on the demand for Corsair's products, the Goldman analyst also expresses his belief that the adoption of video gaming and streaming as alternative sources of entertainment might represent a permanent shift in the market even as the current, ongoing pandemic subsides. This conjectured shift in spending trends can help Corsair in the long-run, and when combined with the current move towards high-margin peripherals exhibited by the company's recent sales, will not only increase the company's revenue but also provide it with a larger market as time progresses, believes the analyst.

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Following Goldman's lead, investment banks and research firms Credit Suisse, Barclays, Stifel, Cowen and Baird have also initiated coverage for Corsair. Starting from Credit Suisse, the bank's analyst Mathew Cabral has set a $24 price target for the gaming company and added Corsair's products targeting Do-It-Yourself personal computer enthusiasts as another growth driver for the company's top-line revenue in addition to its gaming accessories and peripherals.

Cabral believes that Corsair's product portfolio is the most diversified in terms of catering to all types of customers, and that the upcoming console cycles will provide a good opportunity to the company for earning revenue through its custom-built gaming controllers. All of these factors combined have led the analyst to predict a double-digit top-line growth and improved Earnings-Per-Share margin.

Firm:Price Target ($):
Goldman Sachs32
Credit Suisse24

Barclays analyst Mario Lu also cites Corsair's strength in the DIY market as a key driver for its brand image, and he is also optimistic about the company's ability to benefit from changing market dynamics in the wake of the coronavirus pandemic. Lu also sets a $24/share price target for Corsair, and believes that increasing adoption of eSports and streaming will help the company.

Stifel's Drew Crum ties Corsair's growth with that of the video games industry and states that since the industry is headed in a positive direction, the peripherals manufacturer also has a bright future ahead of it. Like Goldman, the Stifel analyst also places a 'Buy' rating on the stock as he states that the share price at Friday's close is a "reasonable" representation of the company's value.

Cowen analyst Doug Creutz and Baird analyst Colin Sebastian both place Corsair's ability to profit from the growing eSports and live streaming industry sectors. Sebastian also expresses his confidence in Corsair's ability to benefit from selling high-margin peripherals and from maintaining its current market share.

After climbing by as much as 6% during pre-market trading today, Corsair's shares have lost some of that momentum as a correction takes place. Following its Initial Public Offering at the end of last month, Corsair's shares dropped as they struggled to maintain their offer value of $17/share. Its opening share price today factors in an important upside over the opening price, and analyst estimates peg further growth potential for Corsair's shares. For the first six months of this year, Corsair had reported $689 million in revenue and earnings-per-share (EPS) of $0.14.