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Cirrus Logic (CRUS)
NASDAQ:CRUS
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Cirrus Logic
(NASDAQ:CRUS)
73Outperform
Positive Factors
Earnings Performance
The company turned in a solid 3Q performance, beating revenue and earnings by a wide margin with healthy upside to the 4Q outlook.
PC Market Success
The company is making significant strides in the PC space with an accelerating pipeline of design wins and largely greenfield opportunities.
Revenue Growth
Opportunities to drive revenue growth through its end market diversification strategy are viewed positively, particularly in the PC and Automotive spaces.
Negative Factors
ASP Pressures
The transition of the next generation boosted amp and 22nm codec across the full product family should help offset typical ASP pressures.
Cirrus Logic (CRUS) vs. S&P 500 (SPY)
Market Cap
$5.49B
Dividend YieldN/A
Average Volume (3M)657.41K
Price to Earnings (P/E)18.8
Beta (1Y)1.36
Revenue Growth2.99%
EPS Growth75.39%
CountryUS
Employees1,625
SectorTechnology
Sector Strength46
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)5.50
Shares Outstanding53,144,928
10 Day Avg. Volume622,867
30 Day Avg. Volume657,414
Financial Highlights & Ratios
PEG Ratio0.25
Price to Book (P/B)N/A
Price to Sales (P/S)2.88
Price to Cash Flow (P/CF)6.10
P/FCF Ratio6.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$130.00Price Target Upside25.90% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Cirrus Logic Business Overview & Revenue Model
Company DescriptionCirrus Logic, Inc., a fabless semiconductor company, provides low-power and high-precision mixed-signal processing solutions in the United States and internationally. It offers portable products, including codecs components that integrate analog-to-digital converters (ADCs) and digital-to-analog converters (DACs) into a single integrated circuit (IC); smart codecs, a codec with digital signal processer; boosted amplifiers; digital signal processors; and SoundClear technology, which consists of a portfolio of tools, software, and algorithms that helps to enhance user experience with features, such as louder, high-fidelity sound, audio playback, voice capture, hearing augmentation, and active noise cancellation. The company's audio products are used in smartphones, tablets, wireless headsets, laptops, AR/VR headsets, home theater systems, automotive entertainment systems, and professional audio systems. It also provides high-performance mixed-signal products, such as haptic driver and sensing solutions, camera controllers, power conversion, and control ICs and fast-charging ICs used in various industrial and energy applications comprising digital utility meters, power supplies, energy control, energy measurement, and energy exploration. The company markets and sells its products through direct sales force, external sales representatives, and distributors. Cirrus Logic, Inc. was incorporated in 1984 and is headquartered in Austin, Texas.
How the Company Makes MoneyCirrus Logic makes money by designing and selling semiconductor products, primarily focusing on audio and voice signal processing solutions. The company's revenue model is largely based on the sale of these integrated circuits to major original equipment manufacturers (OEMs) in the consumer electronics industry. Key revenue streams include the sale of audio codecs, amplifiers, and other audio processing components that are integrated into smartphones, tablets, laptops, and automotive audio systems. Cirrus Logic has significant partnerships with leading technology companies, which contribute to its earnings by securing large-volume orders and long-term supply agreements. The company's ability to innovate and deliver high-quality audio solutions helps maintain its competitive edge and sustain its revenue growth.
Cirrus Logic Financial Statement Overview
Summary
Cirrus Logic shows strong financial performance with robust cash flow generation and a solid balance sheet. The income statement indicates consistent profitability and operational efficiency, though there is room for improvement in EBIT margins.Income Statement
The TTM (Trailing-Twelve-Months) data shows a solid gross profit margin of 52.3% and a net profit margin of 16.5%, indicating strong profitability. The revenue growth from the previous annual period is modest at 3%, reflecting a steady upward trajectory. The EBIT and EBITDA margins of 20.4% and 24% respectively suggest efficient operations, although there is room for improvement in EBIT margin compared to historical data.78
Positive
Balance Sheet
Cirrus Logic maintains a low debt-to-equity ratio of 0.07, highlighting prudent financial leverage. The return on equity (ROE) is 15.5%, demonstrating effective use of equity to generate profits. The equity ratio stands at 83%, indicating a strong capital structure with substantial equity backing its assets, which contributes to financial stability.82
Very Positive
Cash Flow
The company's free cash flow growth rate is impressive at 19.3%, showcasing strong cash generation capabilities. The operating cash flow to net income ratio of 1.59 reflects robust cash flow relative to earnings. Additionally, the free cash flow to net income ratio of 1.5 suggests effective conversion of earnings to cash, enhancing liquidity.85
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.84B | 1.79B | 1.90B | 1.78B | 1.37B | 1.28B | Gross Profit |
| 963.90M | 916.07M | 956.98M | 923.64M | 707.30M | 674.17M | EBIT |
| 376.79M | 343.47M | 249.03M | 366.34M | 237.18M | 173.48M | EBITDA |
| 443.15M | 401.95M | 316.44M | 423.41M | 285.70M | 242.52M | Net Income Common Stockholders |
| 305.08M | 274.57M | 176.70M | 326.36M | 217.34M | 159.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 563.98M | 526.54M | 480.76M | 380.42M | 497.86M | 314.13M | Total Assets |
| 2.36B | 2.23B | 2.06B | 2.12B | 1.83B | 1.59B | Total Debt |
| 146.48M | 155.22M | 141.07M | 177.84M | 142.46M | 142.89M | Net Debt |
| -379.96M | -347.55M | -304.71M | -191.97M | -299.71M | -149.23M | Total Liabilities |
| 400.44M | 414.56M | 405.68M | 523.58M | 441.61M | 362.90M | Stockholders Equity |
| 1.96B | 1.82B | 1.66B | 1.60B | 1.39B | 1.23B |
| Cash Flow | Free Cash Flow | ||||
| 457.46M | 383.33M | 302.85M | 94.74M | 328.47M | 274.24M | Operating Cash Flow |
| 484.51M | 421.67M | 339.57M | 124.75M | 348.94M | 295.81M | Investing Cash Flow |
| -213.43M | -163.01M | -33.33M | -18.37M | -77.67M | -100.22M | Financing Cash Flow |
| -228.56M | -201.68M | -230.27M | -178.73M | -121.22M | -119.65M |
Cirrus Logic Technical Analysis
Neutral
103.26
Price Trends
103.36
Negative
103.52
Negative
116.17
Negative
Market Momentum
-0.62
Negative
51.20
Neutral
82.45
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRUS, the sentiment is Neutral. The current price of 103.26 is above the 20-day moving average (MA) of 102.13, below the 50-day MA of 103.36, and below the 200-day MA of 116.17, indicating a neutral trend. The MACD of -0.62 indicates Negative momentum. The RSI at 51.20 is Neutral, neither overbought nor oversold. The STOCH value of 82.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CRUS.
Cirrus Logic Risk Analysis
Cirrus Logic disclosed 44 risk factors in its most recent earnings report. Cirrus Logic reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cirrus Logic Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $175.18B | 17.12 | 41.96% | 2.12% | 12.13% | 36.17% | |
75 Outperform | $842.92B | 90.80 | 14.85% | 1.21% | 40.30% | -22.79% | |
73 Outperform | $5.49B | 18.77 | 16.21% | ― | 2.99% | 75.39% | |
71 Outperform | $103.63B | 67.14 | 4.43% | 1.75% | -19.28% | -44.00% | |
67 Neutral | $18.44B | 12.04 | 18.97% | ― | -14.19% | -27.42% | |
65 Neutral | $164.48B | 35.51 | 28.25% | 2.88% | -10.72% | -26.60% | |
58 Neutral | $21.67B | 10.60 | -18.43% | 2.42% | 4.66% | -24.45% |
* Technology Sector Average
Performance Comparison
CRUS
Cirrus Logic
103.26
10.70
11.56%
ADI
Analog Devices
208.94
14.38
7.39%
AVGO
Broadcom
171.99
41.05
31.35%
ON
ON Semiconductor
43.76
-29.79
-40.50%
QCOM
Qualcomm
157.97
-8.00
-4.82%
TXN
Texas Instruments
180.76
11.29
6.66%
Cirrus Logic Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: 1.84% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects mixed results, with strong performance in revenue exceeding guidance, gross margin improvements, and progress in new markets like laptops. However, challenges include a year-over-year revenue decline, increased operating expenses, and a cautious outlook for the next quarter, which balances the overall sentiment.Highlights
Exceeding Revenue Guidance
Cirrus Logic delivered revenue of $555.7 million in Q3 FY2025, exceeding the top end of their guidance range due to stronger than expected demand for smartphone products.
Strong Gross Margin Performance
Non-GAAP gross margin was 53.6%, with a sequential increase of 140 basis points and a year-over-year increase of 230 basis points, driven by higher margin products and lower supply chain costs.
Positive Cash Flow and Buyback
Cash flow from operations was $218.6 million, with a non-GAAP free cash flow margin of 38%. The company also repurchased $70 million in shares.
New Product Launches in Smartphones
Introduction of new custom-boosted amplifier and the first 22-nanometer smart codec in smartphones, indicating strong product development and potential for future revenue.
Expansion into Laptop Market
New products for the laptop market, including a high-volume commercial laptop featuring Cirrus Logic components, with revenue expected to double in fiscal '26.
Continued Growth in Camera Controller Segment
Increased value of camera content contributing to robust results, with significant growth potential in the smartphone market.
Lowlights
Year-over-Year Revenue Decline
Revenue was down 10% year-over-year due to lower smartphone volumes and timing differences in fiscal quarters.
Operating Expense Increase
Non-GAAP operating expenses increased by $3.6 million year-over-year, mainly due to higher employee-related costs.
Q4 Guidance Below Q3 Revenues
Guidance for Q4 FY2025 is a revenue range of $350 million to $410 million, which is lower than Q3 revenues, indicating potential challenges ahead.
Inventory Increase
Inventory increased to $275.6 million, with expectations for further increases in FY '26, reflecting potential demand uncertainties.
Company Guidance
During the Cirrus Logic Q3 FY 2025 earnings call, the company reported revenue of $555.7 million, exceeding the top end of their guidance range, driven by strong demand for smartphone components. Non-GAAP gross profit was $298.1 million with a gross margin of 53.6%, reflecting a favorable product mix shift and reduced supply chain costs. Operating expenses were $129.2 million, with non-GAAP net income at $138.3 million, resulting in earnings per share of $2.51. The company ended the quarter with $816.6 million in cash and investments, up $110 million sequentially, and repurchased 679,000 shares for $70 million. For Q4 FY 2025, Cirrus Logic anticipates revenue between $350 million and $410 million, with a GAAP gross margin of 51% to 53% and operating expenses ranging from $119 million to $125 million. The non-GAAP tax rate is projected to remain between 22% and 24%.Cirrus Logic Corporate Events
Executive/Board ChangesFinancial Disclosures
Cirrus Logic Appoints New CFO Amid Strong Revenue
Positive
Feb 4, 2025
Cirrus Logic has appointed Jeff Woolard as the new Chief Financial Officer, effective February 24, 2025. Woolard brings extensive experience from his previous roles at Velocity Global, Solidigm, and Intel Corporation. In conjunction with this appointment, Ulf Habermann will step down as interim CFO but will continue to serve as Principal Accounting Officer. Additionally, Cirrus Logic reported third-quarter fiscal year 2025 revenue of $555.7 million, exceeding guidance due to strong demand for smartphone audio components and expansion in the laptop market. The company anticipates revenue between $350 million and $410 million for the fourth quarter, with a gross margin forecasted between 51% and 53%.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.