Shareholders might have noticed that Corsair Gaming, Inc. (NASDAQ:CRSR) filed its third-quarter result this time last week. The early response was not positive, with shares down 3.6% to US$12.10 in the past week. The results don't look great, especially considering that the analysts had been forecasting a profit and Corsair Gaming delivered a statutory loss of US$0.03 per share. Revenues of US$363m did beat expectations by 4.2% though. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Corsair Gaming
Taking into account the latest results, the most recent consensus for Corsair Gaming from six analysts is for revenues of US$1.63b in 2024. If met, it would imply a decent 13% increase on its revenue over the past 12 months. Earnings are expected to improve, with Corsair Gaming forecast to report a statutory profit of US$0.27 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.66b and earnings per share (EPS) of US$0.30 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
The average price target fell 11% to US$17.57, with reduced earnings forecasts clearly tied to a lower valuation estimate. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Corsair Gaming analyst has a price target of US$21.00 per share, while the most pessimistic values it at US$14.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Corsair Gaming'shistorical trends, as the 10% annualised revenue growth to the end of 2024 is roughly in line with the 9.5% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.5% per year. So it's pretty clear that Corsair Gaming is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Corsair Gaming's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Corsair Gaming. Long-term earnings power is much more important than next year's profits. We have forecasts for Corsair Gaming going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Corsair Gaming that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.