Corsair Gaming’s (NASDAQ: CRSR) short squeeze seems unlikely at this time
This article first appeared on Simply Wall St News.
After a prolonged decline, Corsair Gaming, Inc. (NASDAQ: CRSR) eventually found support around the critical US $ 20 level. Interestingly, insider sales dried up as the price dropped. However, the stock remains heavily shorted.
An orderly decline with high short-term interest
After a huge rally on its stock market debut in 2020, Corsair Gaming lost 35% of its value in 2021. Between supply chain constraints and chip shortages, negative catalysts haven’t crashed the market. stock – they dropped it in an orderly fashion. .
The negative sentiment has resulted in growing interest in the short term, as the following chart shows.
Currently, it sits at its highest at 33.47% of the float, with 9.7 days to cover. Without being scandalous, these are high numbers. Considering the nature of Corsair’s business, whose target audience is the population of short-term speculators, it is natural to wonder if this title could be the next one.
However, WallStreetBets sentiment analysis shows that this is unlikely, as the comment volume is too low.
Insider sales stop
Looking at the recent insider trades we can see that there haven’t been any sales since the price dropped. This is a positive sign, showing that the insiders refuse to sell at these prices.
What is Corsair Gaming worth?
Despite the drop, the stock’s ratio of 17.34x is currently above the industry average of 11.88x, meaning it is trading at a higher price than its peers. On top of that, it looks like Corsair Gaming’s share price is relatively stable, which could mean two things: On the one hand, it may take a while for the share price to fall back into a low range. attractive purchase, and on the other hand, there may be less chance of buying low in the future once it reaches this value. Indeed, the action is less volatile than the market at large, given its low beta.
What does the future of Corsair Gaming look like?
Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. While value investors argue that it’s intrinsic value versus price that matters most, a more compelling investment thesis would be high growth potential at a low price.
With earnings expected to grow 72% over the next two years, the future looks bright for Corsair Gaming. It appears that a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.
What this means for you:
Are you a shareholder? While CRSR is trading at a higher multiple than the industry average, growth expectations are also much higher. Additionally, it appears that insiders are dissatisfied with the current valuation, refusing to sell which may be a positive sign. Before making this decision, please check if its fundamentals have changed.
Are you a potential investor? If you have been keep an eye on CRSR for a while, you have probably observed that it has held above the critical level of US $ 20. This is a positive sign but of a purely technical nature. However, if you are only speculating for the purpose of short squeezing, it seems that the chances of this happening anytime soon are not very high.
So, if you want to delve deeper into this title, it is crucial to consider the risks it faces. During our analysis, we found that Corsair Gaming has 2 warning signs, and it would be unwise to ignore them.
If you are no longer interested in Corsair Gaming, you can use our free platform to view our list of over 50 other stocks with strong growth potential.
Simply Wall St analyst Stjepan Kalinic and Simply Wall St do not have any position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material.