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Analysts Just Made An Incredible Upgrade To Their Cirrus Logic, Inc. (NASDAQ:CRUS) Forecasts

Simply Wall St
·3 min read

Shareholders in Cirrus Logic, Inc. (NASDAQ:CRUS) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After this upgrade, Cirrus Logic's ten analysts are now forecasting revenues of US$1.3b in 2021. This would be a solid 8.4% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 23% to US$3.31. Before this latest update, the analysts had been forecasting revenues of US$1.2b and earnings per share (EPS) of US$2.17 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Cirrus Logic

earnings-and-revenue-growth
earnings-and-revenue-growth

It will come as no surprise to learn that the analysts have increased their price target for Cirrus Logic 6.1% to US$87.63 on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Cirrus Logic at US$95.00 per share, while the most bearish prices it at US$70.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Cirrus Logic is an easy business to forecast or the underlying assumptions are obvious.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Cirrus Logic's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 8.4%, well above its historical decline of 0.5% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 10.0% next year. So while Cirrus Logic's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue forecasts, although the latest estimates suggest that Cirrus Logic will grow in line with the overall market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Cirrus Logic.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Cirrus Logic analysts - going out to 2023, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.