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CRSR : Reasons why it will go up and touch the moon ๐Ÿš€๐ŸŒ• (Elgato)

# 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 โ€œFacecamโ€ 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: itโ€™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 donโ€™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 PCโ€ฆ) 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 ๐Ÿ”ฅ

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

# Conclusion

TL; DR: It will moon sooner or later so Buy shares, donโ€™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.

What do you think?

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45 Comments

  1. Media is reporting $.43/share expected which is a slight beat on earnings. The stock will double in the next few years and we will see flashes of that like we did earlier this year.

  2. One more thing I love about CRSR other than their great fundamentals, is their low float. This thing has a high floor, high ceiling outlook imo. Finally dove in yesterday after doing some research. I like the stock

  3. Damn.. I went full margin on CRSR believing it wouldn’t go lower than 30 again after the last sudden run to 40+ and here we are, when all this awesome news drops and earnings are closing.. I get margin called =_=

    CRSR to the moon guys, my account depends on it xD

  4. Eagletree is a good thing for retail. The reason you can get In criminally cheap. Load up and own the float, make institutions chase when they can no longer deny numbers

  5. Agree with everything except the part about not selling covered calls, thatโ€™s the only money Iโ€™ve made in the last two months. Itโ€™s obvious this is undervalued, but the eagletree stuff will absolutely hold this down short term.

  6. 3k shares in and considering adding more

    CRSR is a leading player of a guaranteed growing industry (gaming/streaming). And itโ€™s now priced like a value stock. If Q2 earning doesnโ€™t pump it up, Q3 will definitely do.

  7. 2000 shares @ 32.something. Added another 500 after it dropped below 30 and I saw the elgato camera, shit even I want that and I’m an out of touch millennial.

    If earnings are ok and it doesn’t pop after then I’m 100% going all in on this stock to 4000 shares. With those products, DDR5, more graphics cards around for builder, their best quarters coming up, twitch and steam numbers continuing to go up and Delta covid probably causing a slight stay at home vibe this winter there’s just too much good news and no bad.

    See you guys @ 100 next spring.

  8. I’m on the fence with how profitable streaming hardware and software will be in the future. sure they may be like an all in one company, which is nice, but their price point for their products is too much for someone just thinking about streaming and there’s better gear out there for the pro streamers. So many people started streaming in 2020 because what else was there to do? Their stream deck is like the only thing they make unique.

    I think their play is to market towards Companies as “meeting productions” or something. Video conference rooms will prob be mandatory when all of your employees are WFH all days of the week, might as well make your employees look good on camera.

  9. As I wrote before, it’s dead money, you are better off with some fucking bonds.

    Big money will dump the moment it goes 32-34$. And some idiots are always left holding the bags.

  10. The attempted pump beings, you a $45 bag holder? Eagletree still has over 54 million shares of Corsair and are constantly selling off that position when Corsair moves in a positive direction. If this stock even thinks of moving up to 32-37 levels itโ€™s going to get dumped hard again.

Reddit gold to whoever helps me understand how the dead wallet works [beginner question]

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