Sup apes. In my first DD last week, I gave a short rundown of why Corsair is incredibly undervalued, and how it should be in everyone’s portfolio. With Part 2, I’m addressing a lot of the comments I got as well as going a bit deeper into how Corsair will make this industry their bitch and reach ATH in 2021.
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Why is Corsair in a strong position to leverage the gaming and streaming industry?
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Corsair didn’t snooze, but rather spend the last years hunting for good companies to acquire. Being well funded, profitable and raking in cash every year allowed them to expand in all directions with a core focus on the fastest growing niche: Streaming. Have a look at their investor relations page:
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“Corsair is a leading global provider and innovator of high-performance gear for gamers and content creators. Our industry-leading gaming gear helps digital athletes, from casual gamers to committed professionals, to perform at their peak across PC or console platforms, and our streaming gear enables creators to produce studio-quality content to share with friends or to broadcast to millions of fans.
*CORSAIR also includes subsidiary brands Elgato, which provides premium studio equipment and accessories for content creators, SCUF Gaming, which builds custom-designed controllers for competitive gamers, and ORIGIN PC, a builder of custom gaming and workstation desktop PCs and laptops.**
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With Elgato they positioned themselves years ago already to capitalize on one of the fastest growing entertainment subsegments (Streaming). While acquiring SCUF Gaming and ORIGIN PC allowed them to also expand and play in the console market as well as Pre Build PCs and laptops. They basically moved up the ladder from RGB fans, keyboards, RAM sticks and Cases to EVERYTHING you need to play, stream or game properly.
How much faster is Corsair really expanding?
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I cannot stress this enough, but their last quarter results really blew it completely out of the water. Seeing how they raised guidance, I think August will be even more brutal. One for value:
- $529.4 million in net revenue, an increase of 71.6% year-over-year.
- $175.9 million net revenue for Gamer and creator peripherals segment, an increase of 131.9% year-over-year.
- Gross profit was $160.3 million, an increase of 103.9% year-over-year, with a gross margin of 30.3%, an improvement of 480 basis points year-over-year.
- Operating income was $67.3 million, an increase of 404.5% year-over-year.
- Adjusted operating income was $80.4 million, an increase of 221.4% year-over-year.
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Do yourself a favor and whip up a site like FinViz, punch in your favorite meme stock and have a look at their revenue number vs market cap. There’s a reason why GME got picked up by DFV. Sales is still king and undervalued companies with aggressive growth have insane potential short and long term.
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Why hasn’t it blown up yet to +100?
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There is a good amount of chatter about two things. One being market manipulation, the other is that there is very little retail investor interest, compared to the amount of net sellers. The second point actually holds up, the stock never really got picked up by retail investors (or apes) and a lot of the commenters that did buy it up, mentioned how they were perfectly content with amassing shares every month while the price is still low. Pure but selfish value investing.
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Eagle What?
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This one was also pointed out a lot. Corsair is owned by a private equity firm called EagleTree. They purchased the majority stake back in 2017 (which in turn allowed Corsair to expand much more aggressively) and now is obligated to reduce their share position over the next years until they only hold 10% of the company.
They currently hold 61.9%. The shares sold are mostly picked up by Vanguard, Blackrock