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Why You Should Keep an Eye on Cirrus Logic (CRUS) Stock?

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Investors need to watch for Cirrus Logic, Inc. CRUS, which currently carries a Zacks Rank #2 (Buy).

CRUS has been witnessing northbound earnings estimate revisions. The Zacks Consensus Estimate for fourth-quarter fiscal 2022 earnings has witnessed an upward revision of 72% over the past 60 days. The consensus mark moved 17.5% north for fiscal 2022 over the same time frame. CRUS has an impressive surprise history as well, with its earnings having topped estimates in three of the trailing four quarters, the average surprise being 16%. Shares of CRUS have surged 92.3% over the past three years.

Adding well-performing stocks to the portfolio at the right time aids in maximising portfolio returns. Thus, with such strong fundamentals, CRUS stock appears a good investment pick now.

Cirrus Logic, Inc. Price

Cirrus Logic, Inc. Price
Cirrus Logic, Inc. Price

Cirrus Logic, Inc. price | Cirrus Logic, Inc. Quote

Key Drivers

Headquartered in Austin, TX, Cirrus Logic is a fabless semiconductor supplier, which develops, manufactures and markets analog, mixed-signal, and audio DSP integrated circuits (ICs).

CRUS’s chips are used in a wide range of industrial and consumer markets, including portable and non-portable media players, smartphones, tablets, home-theater receivers, automotive entertainment systems, televisions, docking stations as well as wearables, including smart watches, action cameras, smart bands and VR headsets.

Cirrus Logic is benefiting from strong demand for high-performance mixed-signal content shipping for smartphones, fast-charging ICs and haptic solutions. Customer engagement across its portfolio remains strong. Increase in penetration of its audio solutions in smartphones is a positive.

In the last few years, Cirrus Logic unveiled a variety of products related to flagship and mid-tier smartphones and the emerging digital headset market. The products include audio codecs and DSPs, amplifiers, SoundClear embedded software, etc.

Growth opportunities in voice biometrics and closed loop controllers are likely to be the key drivers in the long term. A sustained focus on expanding product portfolio will help CRUS gain customers, driving revenues in turn.
Cirrus Logic has a strong balance sheet. As of Dec 31, 2021, CRUS had cash and marketing securities of $199 million with no long-term debt. The net cash available on its balance sheet can be used for pursuing strategic acquisitions, investment in growth initiatives and distribution to its shareholders.

Cirrus Logic delivered strong third-quarter fiscal 2022 results. CRUS reported adjusted earnings of $2.54 per share, beating the Zacks Consensus Estimate 18.1%. The bottom line rose 19% from the prior-year quarter’s reported figure of $2.13. Total revenues of $548.3 million surpassed the consensus mark 7.3% and increased 12.9% year over year.

The top-line performance was driven by increasing demand for high-performance mixed-signal content shipping for smartphones as well as higher demand for fast-charging ICs in smartphones and audio products in laptops. Cirrus Logic ramped up shipments of boosted amplifiers and haptic drivers, ahead of the upcoming product launches.

Other Key Picks

Some other stocks worth considering from the broader technology sector are Broadcom AVGO, Apple AAPL and Texas Instruments TXN. Texas Instruments sports a Zacks Rank #1 (Strong Buy), while Apple and Broadcom carry a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.49 per share. The long-term earnings growth rate of AVGO is pegged at 14.5%.

Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average being 1.9%. Shares of AVGO have increased 22.5% in the past year.

The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.16 per share. The long-term earnings growth rate is pegged at 12.5%.

Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average being 20.3%. Shares of AAPL have rallied 24.3% in the past year.

The Zacks Consensus Estimate for Texas Instruments’ 2022 earnings is pegged at $9.09 per share. The long-term earnings growth rate is 9.3%.

Texas Instruments’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average being 12.4%. Shares of TXN are down 3.9% in the past year.


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