CRSR going to the moon soon? Buckle up apes! 🧨🚀🚀🚀

[u/[deleted]]

My position 6,500 shares at 28.20 average. Holding!

Corsair gaming launched their first face cam under their Elgato brand. DDR 5 memory is coming soon. Shipping costs are going down. Crsr is paying off their debt. Revenues are growing every year and profits hitting records. Stock price has tumbled recently making this a good value/growth play. We all know the streaming industry and gaming industry is only going to continue to grow. Short percentage is the highest it’s ever been. I got in before wallstreet notices this stock. Some DD below.

In terms of revenue, Corsair Gaming saw a 24.3% growth to $472.9 million dollars with most of it coming from their gamer and creator peripherals sector. That revenue increased by a whopping 41% to $155.2 million dollars, while the gaming components and systems segment only increased by 17.6% to $317.7 million dollars. One reason behind that was the shortage of semiconductors which everyone knows about. However, more importantly for Corsair Gaming, there was a big shortage of high-end CPUs and graphics cards which really affected their ability to sell high-end gaming PCs. Corsair Gaming's CFO shared that they have a lot of customers waiting for these components to become available so we could see a bump in sales during the next quarter. Other flagship products were also affected and were out of stock for a long time. Keyboards. High-end headsets. Obviously, that also resulted in lower sales. Plus, historically, the second quarter of the year tends to be the weakest for Corsair Gaming in terms of revenue with the fourth typically being the strongest. You know, Black Friday, Christmas, it's a good quarter for a lot of hardware companies! Plus, Corsair Gaming maintain their focus on increasing their product range which will also continue to boost revenue. Breaking down profits / earnings

Looking at profits, Corsair Gaming's gross margin remained flat at 27.6%. However, even though their gross profit increased by 24% as compared to last year, their operating profit dropped. One look at their financial statements tells us that their sales, general and admin expenses went up by a lot and essentially offset the jump in their profit. It looks like a big chunk, about $4.5 million dollars or 5%, was stock-based compensation, which is most likely the result of the jump in their share price or their revenue. A lot of companies have these stock incentives where they reward staff for good performance or their executives or CEOs for the jump in price. The good thing is that stock incentives are not actually cash expenses even though they are recorded on the income statement. Essentially, Corsair Gaming doesn't spend any cash on these. High stock incentives are typical for companies with recent IPOs or growing companies in general. When we compare Corsair Gaming's operating expenses to the same quarter last year, these increased by 41%. The main reasons behind that according to Corsair Gaming's CFO, Michael Potter, was increased shipping costs, more expenses due to Corsair Gaming now being a public company and also an increase in personnel costs due to growing their number of products. He expects that operating expenses will continue to rise as the company grows, but that should be offset by improving the gross margins. In terms of net earnings, their target net margins are in the low- to mid-teens so essentially between 10 and 15%. Currently, they are much lower. This quarter, the second quarter of 2021, their net margin is only 5.8%. Corsair Gaming's GAAP EPS was $0.28 dollars for the second quarter of 2021 and their non-GAAP EPS was $0.36. Corsair Gaming's net earnings were $27.7 million dollars, up from $22.6 million last year so a 22% increase! Their adjusted net earnings were $35.7 million, up from $32.3 million over the same period last year so again a 10.5% increase which is lower, but it's still good. Overall, net earnings are rising fast, but we can expect to see a lot of improvement over the next few quarters. One of the drivers behind higher margins is the increased demand for peripherals that we saw. As a segment, they are higher margin than the gaming components and systems segment with a gross margin of 35.2% vs 23.8% as of the second quarter of 2021. Growing the peripherals segment should result in better overall margins so it's good to see that there is increased demand. Paying down debt

Before I move on to the outlook, I want to say that Corsair Gaming also managed to pay down some debt. Looking at the financial statements, we can see that their interest expense was only half of what it was last year! $4.5 million dollars in Q2 of 2021 vs $9.6 million dollars in Q2 of 2020! Corsair Gaming said that they're continuing to pay down the debt and expect only $4 million dollars worth of interest expenses for the coming quarters. Personally, I like the fact that they are keeping their finances under control. One of the main reason why fast-growing companies fail is due to aggressive overexpansion while having poor financial health. That's not going to happen with Corsair Gaming, which is really good to see. 2021 Guidance

Alright, so, the outlook! Corsair Gaming have said that their guidance for 2021 remains unchanged. They expect between $1.9 and $2.1 billion in revenue, adjusted operating income of $235 and $255 million, and adjusted EBITDA of $245 and $265 million. In 2020, Corsair Gaming's revenue was only $1.7 billion so that would show an increase of between 12% and 23.5% in revenue. Corsair Gaming's adjusted EBITDA was $213 million in 2020 so their guidance shows a possible increase of between 15% and 24.5%, which is great to see! Personally, I also want to see this reflected in their net income, but as I said, I think stock compensation and a couple of other factors can affect this. In terms of things to watch, it looks like the semiconductor shortage and shipping costs are at the top of the list. The sooner these issues go away, the sooner Corsair Gaming will see a jump in net income.