Small/Mid-cap companies – Analysis

Today, we start with Corsair Gaming.

Company Overview:

Corsair Gaming, Inc., together with its subsidiaries, designs, markets, and distributes gaming and streaming peripherals, components and systems in the Americas, Europe, the Middle East, and the Asia Pacific.

Gaming is becoming a notable industry and in the long-term, Corsair has the potential to grow.

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Courtesy: Simply Wall St.

Here are some good points:

The stock is undervalued at $26.41; analysts expect the stock to be valued at around $63

The earnings though were less in the last earnings analysts expect the growth to be significant over the next 3 years. Earnings grew by 80.2% in the past year

The forecast of revenue is at par with the market growth that is 10.2%

For the past 5 years, the growth is 65% per year. The company seems to have a good record in its finances except in a few places.

It’s not bullish at all points. Here are a few metrics that should bother you as an investor.

It has a high level of debt, and the price target was recently reduced, the company doesn’t pay any dividend.

Industry and Management

The management is experienced, Andrew Paul has been serving the company for almost 28 years.

The industry trends are as follows:

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Courtesy: Insider Intelligence

We can see a spike in 2020 which is obvious due to the coronavirus pandemic though it is estimated that the spike will fall for the upcoming years.

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This points out to the usage and the viewers – More the viewers more the creators will exploit unknown waters.

What’s your take on the company? Have analysis for small/mid-cap companies? Post it down below on the thread!

Let’s talk about CuriosityStream – The company that streams documentaries. Genres like science, history, society, nature, lifestyle, and technology are available through subscription video-on-demand (SVoD). Notably, the company had an IPO during October 2020 when the people were high on streaming services, it currently boasts 16 million total subscribers and is a small-cap company with a current consensus of buy amongst analysts 60% of them saying so.

Let’s take a deep look into the company and its prospects:

The company still hasn’t reported a profit, but analysts expect it to break even in 2023, the balance sheet seems fine with a high growth analysis. Currently, the stock is low here’s the graph.

The company reported a strong third-quarter result with improved earnings, revenues and profit margins.

Third-quarter 2021 results:

  • Revenue: US$18.7m (up 114% from 3Q 2020).
  • Net income: US$830.0k (up US$12.0m from 3Q 2020).
  • Profit margin: 4.4% (up from a net loss in 3Q 2020). The move to profitability was primarily driven by higher revenue.

The P/E ratio is negative 9.4x as the earnings are $-42.7M. The company remains unprofitable and sounds like a turnoff right now. But let’s have a look at its future growth.

The company has strong forecasts as said by analysts with regards to earnings and revenues! That’s something good provided the current scenario and it also boasts a healthy financial position here’s the visual depiction for the same.

Here’s the projected growth analysis according to MarketWatch

The global Documentary Film and TV Show market is anticipated to rise at a considerable rate during the forecast period, between 2021 and 2025. In 2021, the market was growing at a steady rate and with the rising adoption of strategies by key players; the market is expected to rise over the projected horizon.

Global Documentary Film and TV Show Market 2021 Size, Share, Market Analysis, Applications, Product Types, Top-most Manufacturers Segment Analysis, Different Key Regions, Growth Factors, CAGR Value, Industry Trends, Innovations, Forecast to 2026 - MarketWatch

Will this be a buy for you as well?

Photo Credits and major Source for Analysis: Simply Wall St

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Neurocrine Biosciences

While exploring biopharmaceutical companies and looking for something in the small/mid-cap company domain, I found Neurocrine Biosciences, a neuroscience-focused biopharmaceutical company, which discovers, develops, and delivers various treatments for people with neurological, endocrine, and psychiatric disorders. The company’s portfolio includes treatments for tardive dyskinesia, Parkinson’s disease, endometriosis, and uterine fibroids, as well as clinical programs in various therapeutic areas. Its lead asset is INGREZZA, a VMAT2 inhibitor for the treatment of tardive dyskinesia.

Let’s jump straight into the numbers

The California based company having a market cap of $7.8B has a P/E ratio of 17.6 that number is due to the earnings of $445M with revenue of $1.07B. EPS of $4.7 which is fairly good for such a stock. The company is fairly undervalued, as per analysts it is undervalued by a whopping 72.8% with a fair value of $302.8 per share.

The Price to Earnings ratio or the PE ratio is good at 17.6 as compared to the industry average of 25.2. The price to earnings growth ratio [PEG] is 0.5, which is supposedly ‘good’. A PEG ratio of 1.0 or lower suggests a stock is fairly priced or even undervalued. Here’s the forecast of the company:

The Future?

Well all seems good and it does according to the numbers, we are well aware of the neuroscience boom that will happen sooner or later and that’s what the company is banking on, its good intentions to combat Parkinsons with sophisticated techniques has made it revered amongst the analysts at Simply Wall St.

The company outperforms the industry and market both in earnings and growth, that’s a positive sign. The EPS growth tells a similar tale.

What surprised me while going through some analyses as there were hardly any risks associated with the company, don’t take my word for it, do your research, but for now, that’s what I came across.

Past performance

The company has a notable increase in the profit margins to 41.6% from 9% last year. The earnings have also grown by 77.6%. It posts a considerably high ROE of around 33% with high ROE and ROCE as compared to the industry, 23.2% and 12% respectively.

Financial Health

The company has good financial health where all of its cash is more than the debt, though the debt isn’t reducing, the debt is covered by the operating cash flow which is fairly good. Its short term assets satisfy both the long and short term liabilities. The company doesn’t pay dividends as of now.

Before you go, here’s some recent news for the stock: Neuroscience pens a $2.6B pact with Sosei Heptares; its focus on high-risk research and development has brought the companies together.

Happy Investing!