Price AnalysisStocks

Time to Buy This Nasdaq Stock? 52% Down

Corsair Gaming struggles this year.

Corsair Gaming (CRSR) stock witnessed a massive fall within the previous year, surrendering over 50% as investors remain worried that the firm’s COVID-driven growth might not stay forever. Corsair’s Q1 2022 earnings, released on 5 May, confirmed that the firm lost shelter-in-place orders introduced some few years ago to manage the pandemic.

Corsair sells video gaming peripherals and hardware and won big during the COVID era. The number of individuals keeping themselves busy during lockdowns with video games increased, translating to impressive demand for Corsair’s offerings.

Moreover, the company enjoyed stimulus checks, with reports suggesting individuals spent about a third of their bills on online gaming. However, investors should beware that Corsair runs in an industry that appears created with long-term growth goals. So, should you capitalize on the massive pullback and purchase the stock? Let us find out.

Corsair Gaming to Struggle in 2022

Corsair announced $380.7 million in revenue in Q1, translating to a 28% Y/Y decline. The firm’s adjusted income declined to $0.09/share from the prior year’s $0.58. It’s noteworthy that Corsair’s quarter one revenue stayed 23% up than 2020 Q1 when COVID was yet to dominate the globe.

So, the company faces a hazardous 2022 as far as year-over-year is concerned as Corsair enjoyed attractive sales increases within the past couple of years. Also, it encounters other challenges from escalating inflation and supply chain issues, which lead to a surge in component and shipment costs. Also, Ukraine’s conflict impacted the video gaming market.

These headwinds will likely mean massive challenges for Corsair in 2022. Corsair’s guided stands at $1.7 billion in 2022 at the mid-level of the guidance range, a 10% decline from $1.9 billion in 2021 revenue. Analysts expect adjusted operating returns at $100 million – $120 million, whereas adjusted EBITDA could be at $110 million – $130 million.

The company expected revenue at $2 billion in 2022 and adjusting operating returns of between $195 million and $215 million. Meanwhile, Corsair anticipated EBITDA at $205 million – $225 million.

So, the firm has strayed far from its 2022 achievements, and that might impact the stock price negatives in a short time. Nevertheless, the company remains steady in the long term amidst increasing gaming hardware, components and peripherals demand.

Editorial credit: Michael Vi / shutterstock.com

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