Goldman Sachs Covers CRSR and CRCT with More Cautious Demand and Valuation Views, Assigning Sell Ratings to Both

Overview

Goldman Sachs initiated coverage of Corsair Gaming (CRSR) with a Sell rating while maintaining a Sell rating on Cricut Inc. (CRCT). The report's core view is that the niche, non-essential consumer hardware markets served by both companies will face slowing demand, while mix improvement from platformization and higher-margin businesses will not fully offset revenue and profit pressure in their core hardware businesses.

Core views

First, AI infrastructure buildouts are crowding out DRAM and NAND capacity, raising PC bill-of-materials costs and reducing shipments, creating direct pressure on CRSR's DIY PC components, prebuilt systems, and peripherals. Second, inflation, energy costs, and affordability issues are reducing middle-income households' willingness to purchase discretionary products such as CRCT cutting machines. Third, higher-margin businesses including Elgato, Fanatec, and CRCT Platform support longer-term revenue quality improvement, but remain constrained in the near term by weakening core hardware demand and increased marketing and product investment. Fourth, both companies' share prices and valuations already reflect relatively optimistic expectations, and the report considers their risk-reward unattractive.

Analysis framework

The report evaluates the companies using forecasts for the global PC total addressable market, assessments of memory supply, demand, and pricing, segment revenue and gross-margin analysis, correlations with consumer discretionary cash flow, comparisons of earnings estimates with FactSet consensus, and weighted fundamental and M&A valuation methodologies.

Methodology notes

• Valuation methodsWeighted Fundamental and M&A Valuation Method

  A 12-month price target is derived by weighting fundamental value and M&A value

  CRSR's price target is derived by weighting 85% of fundamental value of $9.00 and 15% of M&A value of $23.00, resulting in $11.00. The report also applies this framework in assessing CRCT's price target.

• Risk-RewardScenario Stress Testing

  Apply stress to operating forecasts and use different valuation multiples to assess upside and downside

  The report compares the gap between current prices and price targets, as well as upside/downside skew under stress scenarios, and ranks the names relative to the broader hardware coverage universe.

• Industry AnalysisGlobal PC Total Addressable Market Analysis

  Derive downstream demand through PC shipments, average selling prices, and component costs

  Based on PC shipments, average selling prices, and changes in DRAM and NAND costs, Goldman Sachs assesses near- to medium-term pressure on DIY PC builds, components, and peripheral demand.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• CRSR

  Directly Covered Name

  Strengths

  Elgato's creator ecosystem and Fanatec's sim-racing business have relatively high margins and high barriers to entry, and can reduce reliance on traditional PC components; long-term esports, gaming, and potential AI workstation demand still provide a foundation for growth.

  Weaknesses

  Gaming Components and Systems accounts for a high share of revenue and depends on DIY PC demand; rising memory prices, delayed GPU product cycles, and higher system costs will pressure revenue and gross margins.

  Comparison

  Relative to Goldman's broader hardware coverage universe, the report views CRSR's risk-reward as weaker; its 17x forward 12-month P/E is above its approximately 15x historical level from 2024 through year-to-date 2026.

  Risks

  Continued increases in memory costs, a sharp decline in DIY build volumes, lengthening peripheral replacement cycles, weaker consumer discretionary spending, and valuation multiple compression.

• CRCT

  Directly Covered Name

  Strengths

  Platform subscriptions, software features, and pricing actions are driving growth in high-margin recurring revenue; the paid subscription base is expanding, and Platform gross margin is in the high-80% range.

  Weaknesses

  The products business, including cutting machines and materials, remains exposed to discretionary spending pressure among middle-income consumers; sustained investment in product R&D, sales, and marketing is needed to retain users and drive subscription growth.

  Comparison

  CRCT's 26x forward 12-month P/E is close to its approximately 25x historical average, but the report believes the current share price does not fully reflect pressure on product demand and margins; its risk-reward is weak relative to the hardware coverage universe.

  Risks

  Inflation and affordability pressure, weaker-than-expected equipment purchase demand, competition in materials and accessories, elevated operating expenses, and slowing subscription conversion or user engagement.

• DELL

  Industry Read-Through Name

  Strengths

  The report notes that consumer PC and printer revenue represents approximately 5% of its revenue, implying relatively limited direct exposure to the crowding out of consumer peripheral spending.

  Weaknesses

  Higher PC costs may weaken incremental peripheral sales, pressuring strategies that improve hardware profitability through higher attach rates.

  Comparison

  The report lists DELL with a Buy rating, in contrast to the Sell views on CRSR and CRCT.

  Risks

  Rising PC costs, consumer budgets shifting toward core configurations, and declining peripheral attach rates.

• HPQ

  Industry Read-Through Name

  Strengths

  Its sizable consumer PC and printer businesses may find some cushion through product mix and cost pass-through capabilities.

  Weaknesses

  The report believes the impact of budget crowd-out on peripheral attach sales may be more pronounced; consumer PC and printer revenue represented approximately 26% of revenue over the last twelve months.

  Comparison

  The report lists HPQ with a Sell rating, consistent with its higher exposure to consumer PCs.

  Risks

  Weakening consumer PC demand, rising costs, crowding out of peripheral spending, and margin pressure.

Key data

• CRSR Rating and Price TargetSell; $11.00The rating was changed from Neutral to Sell; the prior price target was $7.00.
• CRCT Rating and Price TargetSell; $4.50The Sell rating was maintained; the prior price target was $3.75.
• Implied Return to Price TargetsCRSR -10%; CRCT -18%Versus approximately 11% average 12-month upside for Goldman's broader U.S. hardware, media, telecom, and cable coverage universe.
• Global PC Shipment Forecast2026/2027/2028 YoY -15%/-4%/+0%Equivalent to 245/235/235 million units; the report views memory supply constraints as the primary driver.
• PC Average Selling Price Forecast2026/2027/2028 YoY +18%/+5%/+0%Manufacturers pass through higher input costs via price increases.
• DRAM and NAND Prices2026 DRAM approximately +316%, NAND approximately +256%Goldman Sachs Semiconductor team forecasts cited in the report; higher costs will compress DIY PC build demand and related margins.
• CRSR Revenue MixGaming Components and Systems represented 67% of 2025 revenueThe segment also accounted for 54% of total gross profit and is sensitive to PC demand and memory costs.
• CRSR EPS Forecast2026/2027/2028: $0.87/$0.69/$0.84Respectively 3%/17%/1% below FactSet consensus.
• CRCT Users and SubscriptionsApproximately 5.9 million active users and 3.1 million paid subscription usersAs of the second quarter of 2026; paid subscription users represent approximately 52% of active users.
• CRCT Platform Gross MarginHigh-80% rangeThe Platform business's high gross margin helps improve business mix, but new features and marketing investment may pressure EBITDA margins.

Impact & implications

For investors, the report indicates that Goldman's downside scenario for the PC cycle and discretionary consumer demand should be incorporated into valuations. CRSR's near-term risks are concentrated in memory supply constraints, declining DIY build volumes, and peripheral budgets being crowded out by higher system costs; CRCT's near-term risks are concentrated in equipment demand from middle-income households and operating expenses required to sustain user growth. Over the long term, both companies' transitions toward subscriptions, software ecosystems, and higher-margin adjacent categories retain strategic value, but the report expects their financial contributions to be offset by core hardware headwinds in the near term.

Risks

• The primary upside risks to the Sell view are better-than-expected PC demand, DIY PC build volumes, or consumer discretionary spending.
• If tight DRAM and NAND supply and price increases ease faster than expected, demand and gross margins in CRSR's components business could improve.
• If growth in Elgato, Fanatec, or CRCT Platform is materially stronger than expected, it could offset pressure on core hardware businesses more quickly.
• If CRCT's new products, tiered subscription pricing, and brand marketing effectively increase new users and paid conversion, revenue and profit expectations could improve.
• M&A, capital allocation, or valuation multiple expansion could cause share-price performance to exceed the report's price targets.

What to watch

• DRAM and NAND spot and contract prices, HBM capacity allocation, and whether PC supply-chain supply-demand conditions improve.
• Global PC shipments, average selling prices, motherboard shipments, and the pace of new GPU launches, particularly the recovery in the DIY market.
• CRSR Gaming Components and Systems segment revenue, progress in absorbing inventory costs, and gross-margin trends.
• Revenue growth, market share, and M&A integration performance for CRSR's Elgato and Fanatec.
• CRCT active users, 90-day engaged users, paid subscription users, subscription penetration, and Platform revenue mix.
• CRCT product business sales, marketing and R&D expenses, and whether EBITDA margins can stabilize after user investment.
• The magnitude of revisions to both companies' earnings forecasts relative to consensus and changes in forward 12-month P/E.