Corsair Vs Logitech For Investing
Corsair and Logitech are two hugely successful companies in their own rights. And pitting the two companies against each other is inevitable for investors of any caliber.
Granted, the two companies offer similar gears and have rather stiff competition. However, when it comes to investing, we need to take a deeper look at figures and percentages that concerns Corsair stock/shares and Logitech Stock/shares.
This post on Corsair Vs Logitech aims to break down the differences between these two tech giants, what drives them, and how they fare when it comes to investing.
First, a crash course on the background and history of the two companies.
Corsair or Corsair Gaming, Inc., is a company that deals with hardware and peripherals. The company’s founders are Andy Paul, Don Lieberman, John Beekley and the headquarters are in Fremont, California. Corsair began its journey in 1994 and was initially called Corsair Components and Corsair Memory. The company trades as CRSR at the NASDAQ stock exchange.
As of June 2020 data, Corsair employs 1990 workers. CRSR also maintains a production facility in Taiwan. In addition, Corsair also has a number of distribution centers in a couple of countries including the U.S., Europe, and Asia.
Products of Corsair Gaming Inc.,
Corsair has an impressive collection of products in its inventory. These include:
High-end gaming P.C.s that come prebuilt
Computer cases – other names are cabinet, system unit, tower, and computer chassis.
Memory modules for laptops and desktops including DRAM and DIMM
PSUs for ATX and SFX
Cooling solutions including liquid CPU and GPU
SSD or solid-state drives
Headsets and microphones for gaming
Audio headset stands
Logitech International S.A. is a company that manufactures software as well as computer peripherals. Giacomo Marini, Pierluigi Zappacosta and Daniel Borel founded the company in the year 1989. The other name of the company is Logitech or simply Logi. However, in Japan, Logitech is known as Logicool.
According to a data on macrotrends, the number of employees at Logitech as of 2020 was 6,600. Logitech has its headquarters in Switzerland and California. In addition, they also have offices throughout the Americas, Asia, Oceania, and Europe. Logitech trades as LOGI at NASDAQ and LOGN at SIX stock exchanges.
Products of Logitech
Logitech has a gamut of products under its equally impressive lineup of products lines. These include:
Logitech – Under this product line, the company manufactures keyboards, mice, speakers, and webcams for computers. In addition, they also offer security cameras and accessories for tablets and smartphones.
Logitech C – This line is exclusively for computer webcams.
Logitech G – This line offers gaming products.
Logitech F – This line deals in gamepads both wired and wireless.
Logitech MX – Here, the flagship products are keyboards and mice for computers.
Logitech Harmony – Here, the products are programmable remote controls.
Logitech video collaboration – Under this line, the products are for B2B video conferencing.
Jaybird – This line offers wireless Bluetooth earbuds.
Ultimate Ears – Here, all types of earphones, in-ear monitors, and universal-fit earphones.
Slim Devices – This line is an audio brand.
Corsair Vs Logitech For Investing – The Metrics
If you are an investor, amateur or veteran, a good understanding of the companies’ metrics is paramount. This includes the companies’ financials such as revenue, market cap, cash and debt status, and ownership, among others.
We take a look at the important metrics of Corsair stock and Logitech stock, in this section, so you can make the most informed decision.
Financials + Valuations
Despite all the impressive collection of products from CRSR and LOGI, the primary concern for investors is whether the companies are making money or not – or on their way to making money. And where better to look than the financial statistics of these two companies.
Let’s dig deeper.
Corsair financial statistics according to the fiscal year ending December 30, 2020
Revenue – 1.7B, which is 55.2% increase from the last financial year.
Gross profit – 465.43M, a 107.5% increase year over year.
Quarterly revenue growth – 70.40%
Quarterly earnings growth – 616.00%
Profit margin – 6.06%
Operating income – 158.4M, a staggering 568.0% increase year over year
Net income – 103.2M, which is 1.14 per diluted share. This is in stark contrast to the 0.11 per diluted share from in 2019, resulting in a loss of 8.4m.
Adjusted EBITDA – 213M, which is 197.5% increase year over year.
Logitech financial statistics according to the fiscal year ending December 30, 2020
Revenue – 4.43B, a 53.09% increase year over year.
Gross profit – 1.90B, up 42.98% increase year over year
Quarterly revenue growth – 84.70%
Quarterly earnings growth – 225.50%
Profit Margin – 21.14%
Operating income – 387M, which is a 10% increase from a year ago.
Net income – 935.43M, which is $2.22 per diluted share as opposed to $0.69 per diluted share a year ago.
Adjusted EBITDA – 990.55M
For most investors, revenue is the single most important component that determines whether to invest in a company or not. If you were to compare Corsair and Logitech’s revenue of 2020 in isolation, Logitech’s figures win by a mile.
However, CRSR’s quarterly earnings growth of 616.00% is staggering compared to Logi’s 225.50%. Logitech’s earning percentage is by no means small. On the contrary, Logitech still holds a premium position among its competitors in the industry. In fact, very few companies can boast of such massive growth as Logi’s.
Nevertheless, if you are looking to invest in stocks and shares, you cannot ignore the aggressive quarterly earnings growth of CRSR. We will discuss in-depth about this in the following sections.
Percentage of Corsair share statistics
Insider ownership – 5.57%
Institutional ownership – 91.20%
Percentage of Logitech share statistics
Insider ownership – 0.80%
Institutional ownership – 61.43%
Arguments for and against insider and institutional ownership.
For investors, understanding both sides of the insider and institutional ownership is an important factor.
Inside ownership – the good and the bad.
Stocks that have high insider ownership show the company’s confidence in their prospects. The insider ownership of Corsair shares at 5.57% is significantly higher than Logi’s 0.80%. This shows that CRSR is confident about its ownership, so it does not hold back from maximizing shareholder’s value.
In addition, high insider ownership also comes with the incentive for the company’s leaders to perform exceptionally.
Another advantage of shares that come from high insider ownership is that they can outperform the market indexes.
On the flip side, however, excessive insider ownership can make management lackadaisical towards the shareholders. There is also a chance that the insider leaders put more emphasis on their personal interests and stakes instead of the shareholders in the company.
Institutional ownership – the good and the bad.
High institutional ownership indicates good money, which is always a great piece of information for investors. A major chunk of Logitech shares has institutional ownership. Some of the major names that hold Logitech shares are Vanguard Group Inc, Capital World Investors, Deutsche Bank Ag, Norges Bank and Credit Suisse Ag, among others. So the company is no doubt, a driving force behind the supply and demand in the industry.
Another significant advantage of companies with institutional ownership is in decision making. Shareholders have an equal say in the company’s decisions as opposed to company leaders overriding or making every decision.
But on the downside, high institutional ownership can make individual shareholders a bit less confident. Institutional investors can own up to millions of shares, which they can sell off at any point. This does not make individual investors comfortable about owning a small amount of stock in the same company.
Take the case of Logitech shares, which is owned by some of the biggest financial institutions in the world. If you are a small or an amateur investor, it can be a challenge to invest in Logitech alongside Deutsche Bank Ag. And that is just one big name among the titans.
Another point of consideration for individual investors is that the institutions get more foothold in the company. When institutions hold massive shares, they can use it as leverage to override the company’s agendas. This is also a major concern of unrest for individual investors who might feel they have no voice.
Companies that have a good mix of insider and institutional ownership are the best choice for investors. In this case, Corsair’s has a better balance of insider and institutional ownership than Logitech. So, if investors choose to go with CRSR, It will not be a surprise.
If you are looking to invest in stocks, the market cap is another component you need to keep an eye on. Market cap will allow you to gauge the company’s worth on the open market. In addition, it is also easy to measure the prospects of the company.
The market cap of Corsair at the Q4 financial report of 2020 = 3.96B
The market cap of Logitech at the Q4 financial report of 2020 = 19.81B
Considering the market capitalization values, Corsair stock falls under the mid-cap companies. For investors, mid-cap companies offer the advantage of rapid growth, which is the case with Corsair. In addition, stocks of this size fall in the medium risk spectrum that is appealing to a lot of new investors.
However, the question of whether the particular company lives up to expectations and sustains the rapid growth always remains. In this regard, CRSR is not an exception.
Logitech, on the other hand, falls under the large-cap companies. A company of this size typically commands a lot of weight among its competitors in the industry. Furthermore, they have a gamut of reputable products in their arsenal.
For investors, investing in Logitech stock carries the advantage of minimal risk since it is more conservative. However, the drawback of investing in any stock with such low risk carries less potential for growth over time.
Cash, Debt and Current Ratio
For investors, cash, debt, and a company’s current ratio is another critical component to consider. These metrics show the position of the company that you want to invest in.
Furthermore, for new investors, the company’s current ratio can make or break your investment decision. It is also a sign of whether the company has the financial strength to meet its overall performance obligations.
Corsair’s balance sheet at Q4 financial statement 2020
Cash – 133.34M
Debt – 341.59M
Current ratio – 1.37
Logitech’s balance sheet at Q4 financial statement 2020
Cash – 1.39B
Debt – 35.16M
Current ratio – 1.90
Comparing the cash and debt of Corsair shares and Logitech shares, Corsair’s debt amount does not look good. However, both companies are in a favorable position for investment when we consider the current ratios.
Corsair cash to debt position is not as impressive as Logitech’s. However, the company is still in a good position to pay off its short-term debt without getting into too much trouble. Furthermore, CRSR’s revenue is going up steadily, which should push up its investment prospects.
On the other hand, Logitech has great cash to debt position, which is one of the good reasons to invest in its stocks.
For companies and investors, growth and profitability go hand in hand. Both the companies in today’s discussion have undergone tremendous growth over the years. The percentage, of course, is greatly different.
A deeper look at Corsair’s growth and its future
According to industry watchers, the growth of Corsair shares in 2020 was a staggering 143%. This was a very positive development even during the pandemic. One of the main reasons for such massive growth of CRSR came from game streaming products’ popularity. eSports is one industry that is growing by leaps and bounds, and Corsair is rising up to the occasion with its products.
According to Newzoo 2020 report, the global audience in competitive gaming was about 495.0 million, generating $822.4 million. Furthermore, professional gamers built their own rigs for gaming consoles. And this is where Corsair’s premium products come indispensable for customizing. This includes video capture cards, green screens, microphones, and lighting products.
In addition, power supply units, memory modules, cooling solutions, headsets, computer cases, and game controllers feature high on the list for professional gamers. Corsair’s peripherals and products are on the high-end. However, for professional gamers, the price tag of products is hardly a point of contention. Investing in these high-performance gears enables precision, quietness, reliability, cooling, and the game’s overall aesthetics.
Another reason for Corsair’s growth comes from influencers pushing the sales. Veteran streamers including Summit1g, and Loserfruit, heavily use and endorse Corsair’s gaming products. These professional gamers have millions of followers who can sway the pendulum of sales in a significant manner.
The good news does not end here for Corsair. Since the IPO, Corsair shares jumped up and it keeps growing. Furthermore, there is an ongoing demand for CRSR’s gaming peripherals, which gives the company a good hold in the tech market. Analysts predict Corsair share have the potential to outperform its competitors in the tech market in 2021 and beyond.
Logitech’s growth and what is driving it
Logitech shares have constantly been on the rise for many years. Despite its size and credibility, few companies can boast about near double-digit growth for consecutive years. In this regard, Logitech has been exemplary.
A major reason why Logitech shares register consistent growth is how pervasive its products are. Logitech’s products are present in any environment where there is a computer set up. What makes Logi’s products truly international is a combination of affordability and availability. While CRSR caters to its professional audience with premium products, Logitech offers budget but good quality products.
In addition, the pandemic forcing a large majority of the workforce to the online platform also accelerated the growth of Logitech. According to Logitech chief financial officer, Nate Olmstead, working remotely, video conferencing, streaming and gaming, made Logitech’s products even more relevant. Among the highest sale driving products, include P.C. speakers, USB headsets and Bluetooth tablet speakers.
Another reason for Logitech’s consistent growth is the thriving world of eSports. The products from Logi that drove sales in this department include microphone headsets, video game controllers, and webcams.
Furthermore, Logitech’s outlook for the fiscal year 2021 looks is very positive. The confirmed target for sale growth is between $380 and $400 million, which is fantastic.
Logitech also registered $1.56 and $1.87 per share for reported and adjusted earnings. According to experts from the industry, this was a figure that not even Wall Street was able to achieve in the same year. Wall Street’s earning stood between $0.57 and $0.64 per share so you can see how impressive Logitech’s performance is.
Coming to the competition between Corsair and Logi, there is a lot to be said about it.
Corsair shares have almost doubled since it went IPO in September of 2020. And since it operates in a highly competitive, aka, eSport environment, analysts think that Corsair is poised to take off in the coming years. eSports and the gaming industry, in general, are witnessing tremendous growth and Corsair is right alongside it.
Furthermore, CRSR consistently explores new products, including laptops and prebuilt gaming P.C.s. And the growth pace shows no sign of slowing down.
In addition, Corsair has already grabbed a spot among the top three in the U.S. market share, which is impressive. This shows that it is establishing credibility with its brand among its competitors.
What about Logitech?
Logitech is, without a doubt, a colossus when it comes to the tech industry. This tech titan has been consistently performing in the fiscal periods.
The consensus among the industry’s experts is that Logitech shares are roaring. In addition, projected sales of up to 40% in 2021 have generated a lot of talk among big and small investors.
This does not mean Logitech is an absolute winner with no competition. On the contrary, it faces stiff competition from other giants. Take the recent Apple iPhone 12 event in October 2020, for instance. Besides its iconic phones, Apple’s foray into peripherals and smart speakers ruffled more than a few feathers in the tech industry, including Logitech.
But Logitech stood its ground. This episode alone demonstrates the reliability of Logitech’s foothold in the tech industry. It also boosted a lot of confidence amongst investors and sent them clamoring after Logitech’s shares.
Apart from the notable tech companies, Logitech is facing a healthy competition from Corsair’s aggressive market performance. Nevertheless, Logitech can comfortably hold its ground in the face of stiff competition. Whether or not Logitech shares continue to achieve double digits remains to be seen over the next fiscal periods.
However, Logitech’s impressive range of products that caters to a global audience is an invaluable advantage that not many companies can boast about. Correspondingly, chances of Logi’s revenues and sales falling to a single digit are highly unlikely. Such reliability and impressive performance have given investors a lot of confidence to consider Logitech shares as a hot commodity in the coming years.
Throughout this post, we have seen that both Corsair and Logitech offer valid reasons to attract investors. Both companies are maintaining steady growth and generating impressive revenues.
From the data above, Corsair growing earnings is a lot more aggressive while the revenue remains steady. Logitech, on the other hand, registers extremely high revenue with steady growing earning. Corsair takes the trophy for bespoke gears that carry a premium price tag when it comes to products. On the other hand, no other company measures up to Logitech when it comes to peripherals. And CRSR is no exception.
Nevertheless, for investors, whether you choose to invest in Corsair or Logitech comes down to this:
If you are just getting into investing, Corsair might seem a viable option. Faster growth translates to quicker gains. However, it inherently involves volatility.
However, if you don’t mind investing in a larger company with slower growth, you can’t go wrong with Logitech. The rate of earnings growth may not be as rapid as investing in a smaller company. But on the plus side, the risk is also smaller.
We would like to conclude by pointing out that these are our personal opinions. Thorough research is a must before making investments with either Corsair shares or Logitech shares.