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Why Corsair Gaming Stock Popped Today

By Evan Niu, CFA – Oct 20, 2020 at 1:17PM

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The gaming-peripheral maker gets yet another bullish initiation from Wall Street.

What happened

Shares of Corsair Gaming (CRSR 1.67%) popped today, up 12% as of 12:15 p.m. EDT, after the company received another bullish initiation from Wall Street. Corsair, which provides hardware for gamers and live streamers, went public a little less than a month ago.

So what

Wedbush initiated coverage on Corsair with an outperform rating. Analyst Michael Pachter assigned a $25 price target, which represents approximately 25% potential upside from yesterday's close. Corsair has a "solid niche" market that consists of a "small, but dedicated base of hard core gamers." While most larger rivals address broader markets, Corsair focuses primarily on serving the esports market.

Corsair products including a headphone and a large computer screen.

Image source: Corsair.

Pachter lays out a path for Corsair to sustainably generate 10% revenue growth, on average, in the years ahead. The company would just need to capture 1% of the live-streaming market in order to sell an incremental 10 million gaming controllers per year at over $50 per unit.

Now what

The Wedbush call comes after Corsair received a slew of other bullish initiations yesterday, including:

  • Goldman Sachs: Initiates with a buy rating and price target of $32.
  • Baird: Initiates with outperform rating and price target of $23.
  • Barclays: Initiates with overweight rating and price target of $24.
  • Stifel Nicolaus: Starts with buy rating and price target of $24.
  • Cowen: Initiates at outperform with price target of $24.
  • Credit Suisse: Initiates with outperform rating and price target of $24.

Perhaps adding to the bullish sentiment in the space, Logitech (LOGI 2.23%), which is one of Corsair's chief rivals, reported blowout second-quarter results yesterday, driven in part by strength in gaming peripherals.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Logitech International. The Motley Fool has a disclosure policy.

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