Cirrus Logic
CRUS
is benefiting from strong revenue growth across its high-performance mixed-signal and audio segment.
The company’s fiscal 2023 and 2024 revenues are anticipated to rise 2.1% and 7.8%, respectively.
CRUS has outpaced estimates in all of the trailing four quarters, delivering an earnings surprise of 27.7%, on average.
In the last reported quarter, Cirrus Logic delivered adjusted earnings of $2.01 per share, beating the Zacks Consensus Estimate by 42.5%. The bottom line rose 204.5% from the prior-year quarter’s 66 cents. Total revenues of $490 million surpassed the consensus mark by 16.5% and jumped 67% year over year.
For first-quarter 2023, the company projects revenues between $350 million and $390 million. The consensus mark for revenues is pegged at $370.2 million, suggesting an increase of 33.5% year over year. The consensus estimate for earnings stands at 85 cents per share, suggesting year-over-year growth of 57.4%.
The company also has an impressive
Growth Score
of A. This style score consolidates all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
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Moreover, the stock is down 24.9% from its 52-week high level of $95.84 on Jan 12, 2022, making it relatively affordable for investors. CRUS has lost 16.2% in the past year against a 9.7% decline of the Zacks
sub-industry
.
Strong Fundamentals
Headquarters in Austin, TX, Cirrus Logic is a fabless semiconductor supplier, which develops, manufactures and markets analog, mixed-signal and audio DSP integrated circuits (ICs).
Cirrus Logic benefits 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. The increase in penetration of its audio solutions in smartphones is a positive.
In the last few years, Cirrus Logic unveiled various 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 will likely be the key catalysts.
Cirrus Logic has a strong balance sheet. As of Mar 31, 2022, the company had cash and cash equivalents and marketing securities of $380.4 million while no long-term debt.
In fiscal 2022, the company had generated operating cash flows of $258.2 million. During the same period, it bought back shares worth $167.5 million. Share repurchases are good way of enhancing shareholders’ wealth while boosting the company’s earnings.
However, the company’s near-term prospects might be affected as global supply chain disruptions limit its ability to capitalize on opportunities arising from strong demand. Intensifying competition and adverse currency translations are added concerns for this Zacks Rank #3 (Hold) stock.
Stocks to Consider
A few better-ranked stocks from the broader technology sector worth consideration are
Synopsys
SNPS
,
Aspen Technology
AZPN
and
Broadcom
AVGO
. All stocks sport a Zacks Rank #1 (Strong Buy). 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 $37.06 per share, up 4% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 2.2%. Shares of AVGO have gained 3.8% of their value in the past year.
The Zacks Consensus Estimate for Synopsys 2022 earnings is pegged at $8.47 per share, rising 7.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 19.6%.
Synopsys earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 2.7%. Shares of SNPS have increased 13.8% in the past year.
The Zacks Consensus Estimate for Aspen’s fiscal 2022 earnings is pegged at $5.50 per share, rising 1.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.4%.
Aspen’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 4.1%. Shares of AZPN have grown 29.1% in the past year.
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