Corsair Gaming Boosts Guidance On Higher Demand; Wedbush Raises PT

Corsair Gaming raised its full-year revenue and earnings guidance as the maker of high-performance gear for gamers and content creators is experiencing strong momentum across its key products.

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The company now predicts revenue of $1.651 billion-$1.666 billion in 2020, up from the prior outlook range of $1.616 billion-$1.631 billion. The new guidance implies revenue growth of 50%-52% compared to last year. Corsair (CRSR) expects 2020 adjusted EBITDA to be in the range of $194 million-$200 million, compared to the previous forecast of $187 million-$193 million.

Corsair’s CEO Andy Paul stated, “In our Gaming and Creator segment, we continue to see strong sales in all price points, which we believe indicates that we have both new customers buying gear as well as existing customers refreshing and upgrading. The highest growth continues to be in our streaming products, as gamers want to share video content with their friends and fans.”

Within the Components and Systems segment, the company is experiencing “continued enthusiasm” to build new high-end gaming PCs based on the recently launched high performance CPUs and GPUs. (See CRSR stock analysis on TipRanks)

In reaction to the upbeat guidance, Wedbush analyst Michael Pachter raised the price target to $49 from $34 and reiterated a Buy rating on Corsair. In a research note to investors, Pachter opined, “The pandemic has expanded growth well beyond the normal level, but as growth has largely been driven by new gamers and streamers entering the market, this has widened Corsair’s user-base for the long-term, in our view.”

“We think Corsair is uniquely positioned to compel its users to upgrade from entry-level products in gaming peripherals given its expertise at the high-end of the market, while it can also leverage its niche to drive purchases among streamers and more serious gamers, creating a virtuous promotional cycle,” concluded Pachter.

The Street’s Strong Buy analyst consensus is in line with Pachter’s bullish sentiment and is based on 9 unanimous Buys. Corsair went public in September. Currently, the average price target of $32.33 reflects a possible downside of about 15% from current levels.