# Elgato : the goose that lays golden eggs for CRSR
Elgato is a Corsair subsidiary selling streaming equipment.
Elgato contributed for **33.2% of total net revenue in Q1 2021** ($175.9M) compared with **24.6% in Q1 2020** ($75.9M). In my opinion it will soon be 50%+ of the total net revenue of CRSR considering **the high rate of growth of this industry and its leading position in this booming market**.
Elgato also contributed **43% of total gross profit in Q1 2021** ($68.9M) compared with **28.2% in Q1 2020** ($22.1M). Streaming products have **higher-margin due probably to the brand awareness and the leading position of Elgato in the streaming market**. There is no direct competitor proposing **a WHOLE plug and play streaming setup**.
Elgato just released **new dope products yesterday (July 15th) including a Camera**. The “Facecam” is a new product that they did not sell before and that was very highly anticipated. In my opinion it will **sell like hot cakes**.
The other new products also provide all the parts that were missing to have a **complete streaming setup** (Wave XLR and Wave Mic Arm) and they also release a Mk.2 of their Stream Deck (their **flagship product**).
With all these new products they are all set for a whole year at least and they are **establishing their leadership in the streaming gear market once and for all**. All the streamers/influencers will be talking about that in the next days.
# The two main reasons why the stock tanks (spoiler: it’s not EagleTree)
– **The lack of guidance** for S2 2021 and after: At the time of the Q1 2021 earnings call transcript we were still in the covid period, and it was difficult even for the CEO to **predict if the gaming trend will continue in the same vein for S2 2021**. This lack of guidance does not encourage institutional investors to buy more for the moment (in my heart I feel that we are on a **strong and long-term trend**). Q2 earning and commentary coming out on **August 3rd will be decisive**.
– **The global chip shortage**: I think we are all aware of this problem. We don’t really know when it will end but to mitigate a little the CEO said in the last earnings call that Corsair was **not as impacted** as we can imagine by this shortage **due to its mix of products**.
# Eagle Tree (just a reminder)
Eagle Tree is a private equity firm that helped Corsair **grow substantially** since 2017. They sold 2 287 511 shares on June 14th and 432 989 shares on June 15th, they still have 54 179 559 shares which is equivalent to 58.5% of ownership. They helped CRSR make **good acquisitions** (Elgato, SCUF, Origin PC…) and they are taking some profit. So, thank you Eagle Tree for your good job.
Whether it is Eagle Tree or anyone else who sells, the **only thing that matters is the price**. Institutional investors will buy at those prices if they have **more visibility** (I think that the next results will bring this visibility). At that time even if Eagle Tree want to sell all their shares, they will be **swallowed up by the buyers**.
# Earnings August 3rd coming soon 🔥
I expect a **strong beat** for Q2 earnings, but the more important thing will be the commentary about **guidance**. In my opinion you will want to be in the rocket for this date (not a financial advice).
Logitech earnings release is on July 26th**, this will give an idea of the general market trend**.
My position: 400 shares at $35.60
# Some CRSR numbers
* market cap: $2.8B
* Revenue: $1.92B TTM
* Gross Income: $540M TTM
* Net Income: $149M TTM
TL; DR: It will moon sooner or later so Buy shares, don’t sell calls, **no need to cover anything** (this is obviously **not a financial advice**)
Source: Corsair Gaming, Inc. (CRSR) Q1 2021 Earnings Call Transcript
edit : just added “June” in the Eagle Tree paragraph.