What happened

Shares of Corsair Gaming (NASDAQ:CRSR) plunged today after Cowen & Co. analyst Doug Creutz downgraded the company's stock. 

Shares of the tech stock fell by as much as 17.2% today and were down 16.5% as of 2:13 p.m. EST. 

So what

Creutz downgraded Corsair's stock from outperform to market perform but raised the stock's price target from $32 to $37. The analyst said in an investor note that the valuation of Corsair Gaming's stock doesn't have a "compelling" risk-reward any more. However, he added that the company could still benefit from video game streaming and esports.

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Image source: Getty Images.

Corsair's stock rose yesterday after the company released a revised full-year 2020 outlook. The company's management raised Corsair's full-year revenue guidance from $1.63 billion to $1.66 billion.  

Corsair CEO Andy Paul said in a press release on Nov. 30, "The positive momentum in our business continues to exceed our expectations in both of our business segments" and added that "we now expect net revenue growth of approximately 50% to 52% and adjusted operating income growth of approximately 183% to 192%."

Today's sell-off took away the gains made yesterday, but Corsair's stock is still up an impressive 135% since the company went public in September. 

Now what

Companies that have recently gone public can sometimes experience big stock price swings as early investors react emotionally to negative and positive news about the company. It appears some Corsair investors may be doing just that, but long-term investors may want to instead keep an eye on Corsair's prospects in the growing video game market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.