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Cirrus Logic (CRUS) Surges 58.7% YTD: Will the Upside Last?
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Cirrus Logic, Inc.’s (CRUS - Free Report) stock is continuing its upward trajectory, with a gain of 58.7% year to date (YTD) compared with 12.3% and 12.7% growth of the S&P 500 composite and the sub-industry, respectively.
The stock is down 7.5% from its 52-week high level of $142.83, reflecting further potential upside.
Cirrus Logic is a fabless semiconductor supplier that develops low-power, high-precision mixed-signal processing solutions.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) stock appears to be a solid investment option at present.
Apart from a favorable rank, CRUS has a Growth Score of A. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or 2 and Growth Score of A or B offer solid investment opportunities.
Image Source: Zacks Investment Research
The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters with an average surprise of 56.6%.
Growth Drivers
Cirrus Logic’s performance is driven by demand for its product portfolio. The company recently posted fiscal first quarter 2025 results, wherein total revenues of $374 million beat the Zacks Consensus Estimate by 17.7% and soared 18% year over year.
The uptick was driven by stronger-than-anticipated shipments into the smartphone market. The company’s largest customer accounted for 88% of total revenues in the fiscal first quarter.
CRUS also began ramping production of its custom boosted amplifier and first 22-nanometer smart codec ahead of upcoming smartphone launches in the latter half of the year. Expansion into new markets is an additional tailwind.
Growing momentum in the laptop market and increasing win designs with customers on next-generation flagship smartphones bode well.
In June 2024, CRUS launched its latest lineup of digital-to-analog converters (DACs) and an ultra-high-performance audio CODEC. These innovative solutions are specifically crafted for recording artists, live performers and audiophiles, delivering uncompromising sound quality and exceptional performance.
The new additions to the Pro Audio family include the 8-channel DAC CS4308P, 4-channel CS4304P, 2-channel CS4302P and CODEC CS4282P. These devices offer top-notch performance, minimal power consumption and features like hybrid gain control to address the pressing audio challenges that have been rooted in the industry for a long time.
The company plans to make investments in the advanced battery and power technology market related to high-efficiency charging, battery management and system-side power delivery.
These new products should significantly improve the performance of the prior generations. Owing to these factors, the company expects High-Performance Mixed-Signal and Audio SAM to cross $5.7 billion and $3.3 billion, respectively, by 2028.
Robust Outlook
For second-quarter fiscal 2025, management expects revenues between $490 million and $550 million. The Zacks Consensus Estimate is pegged at $520 million, up 8.1% year over year. The fiscal second quarter of 2025 begins and ends one week later compared with the prior-year quarter. As a result, it has one week of higher volume production associated with seasonal product ramps.
Combined R&D and SG&A are anticipated to be between $149 million and $155 million, respectively. The gross margin is expected to be in the range of 50-52%.
Healthy Balance Sheet
Cirrus Logic is a cash-rich company with a strong balance sheet. As of Jun 29, 2024, the company had cash and cash equivalents and marketable securities of $491.4 million with no long-term debt. Since CRUS has net cash available on its balance sheet, the existing cash can be used for pursuing strategic acquisitions, investment in growth initiatives and distribution to its shareholders.
The shareholder-repurchase activity is noteworthy. The company repurchased 361,218 shares worth $41 million in the last reported quarter. As of Jun 29, 2024, CRUS had $274.1 million worth of shares remaining under its existing share repurchase authorization. In fiscal 2024, it bought back shares worth $186 million.
Headwinds Persist
Increasing expenses particularly higher variable compensation expenses and product development costs likely to weigh on margin performance. Stiff rivalry and volatile forex movement amid uncertain macroeconomic conditions are headwinds.
The Zacks Consensus Estimate for Badger Meter’s 2024 EPS is pegged at $4.06, up 4.4% in the past 30 days. BMI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 12.9%. The long-term earnings growth rate is 17.9%. Its shares have risen 12.5% in the past year.
The Zacks Consensus Estimate for ANSS’ 2024 earnings is pegged at $9.72, up 3.7% in the past 30 days. ANSS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while missing once, with the average surprise being 4.8%. Its shares have risen 3.3% in the past year.
The Zacks Consensus Estimate for MANH’s 2024 EPS is pegged at $4.26. MANH’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average surprise being 26.6%. The stock has surged 28.4% in the past year.
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Cirrus Logic (CRUS) Surges 58.7% YTD: Will the Upside Last?
Cirrus Logic, Inc.’s (CRUS - Free Report) stock is continuing its upward trajectory, with a gain of 58.7% year to date (YTD) compared with 12.3% and 12.7% growth of the S&P 500 composite and the sub-industry, respectively.
The stock is down 7.5% from its 52-week high level of $142.83, reflecting further potential upside.
Cirrus Logic is a fabless semiconductor supplier that develops low-power, high-precision mixed-signal processing solutions.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) stock appears to be a solid investment option at present.
Apart from a favorable rank, CRUS has a Growth Score of A. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or 2 and Growth Score of A or B offer solid investment opportunities.
Image Source: Zacks Investment Research
The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters with an average surprise of 56.6%.
Growth Drivers
Cirrus Logic’s performance is driven by demand for its product portfolio. The company recently posted fiscal first quarter 2025 results, wherein total revenues of $374 million beat the Zacks Consensus Estimate by 17.7% and soared 18% year over year.
The uptick was driven by stronger-than-anticipated shipments into the smartphone market. The company’s largest customer accounted for 88% of total revenues in the fiscal first quarter.
CRUS also began ramping production of its custom boosted amplifier and first 22-nanometer smart codec ahead of upcoming smartphone launches in the latter half of the year. Expansion into new markets is an additional tailwind.
Growing momentum in the laptop market and increasing win designs with customers on next-generation flagship smartphones bode well.
In June 2024, CRUS launched its latest lineup of digital-to-analog converters (DACs) and an ultra-high-performance audio CODEC. These innovative solutions are specifically crafted for recording artists, live performers and audiophiles, delivering uncompromising sound quality and exceptional performance.
The new additions to the Pro Audio family include the 8-channel DAC CS4308P, 4-channel CS4304P, 2-channel CS4302P and CODEC CS4282P. These devices offer top-notch performance, minimal power consumption and features like hybrid gain control to address the pressing audio challenges that have been rooted in the industry for a long time.
The company plans to make investments in the advanced battery and power technology market related to high-efficiency charging, battery management and system-side power delivery.
These new products should significantly improve the performance of the prior generations. Owing to these factors, the company expects High-Performance Mixed-Signal and Audio SAM to cross $5.7 billion and $3.3 billion, respectively, by 2028.
Robust Outlook
For second-quarter fiscal 2025, management expects revenues between $490 million and $550 million. The Zacks Consensus Estimate is pegged at $520 million, up 8.1% year over year. The fiscal second quarter of 2025 begins and ends one week later compared with the prior-year quarter. As a result, it has one week of higher volume production associated with seasonal product ramps.
Combined R&D and SG&A are anticipated to be between $149 million and $155 million, respectively. The gross margin is expected to be in the range of 50-52%.
Healthy Balance Sheet
Cirrus Logic is a cash-rich company with a strong balance sheet. As of Jun 29, 2024, the company had cash and cash equivalents and marketable securities of $491.4 million with no long-term debt. Since CRUS has net cash available on its balance sheet, the existing cash can be used for pursuing strategic acquisitions, investment in growth initiatives and distribution to its shareholders.
The shareholder-repurchase activity is noteworthy. The company repurchased 361,218 shares worth $41 million in the last reported quarter. As of Jun 29, 2024, CRUS had $274.1 million worth of shares remaining under its existing share repurchase authorization. In fiscal 2024, it bought back shares worth $186 million.
Headwinds Persist
Increasing expenses particularly higher variable compensation expenses and product development costs likely to weigh on margin performance. Stiff rivalry and volatile forex movement amid uncertain macroeconomic conditions are headwinds.
Other Stocks to Consider
Other top-ranked stocks worth consideration in the broader technology space are Badger Meter (BMI - Free Report) , Manhattan Associates (MANH - Free Report) and ANSYS (ANSS - Free Report) . Badger Meter and Manhattan Associates sport a Zacks Rank #1 each, while ANSYS carries a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Badger Meter’s 2024 EPS is pegged at $4.06, up 4.4% in the past 30 days. BMI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 12.9%. The long-term earnings growth rate is 17.9%. Its shares have risen 12.5% in the past year.
The Zacks Consensus Estimate for ANSS’ 2024 earnings is pegged at $9.72, up 3.7% in the past 30 days. ANSS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while missing once, with the average surprise being 4.8%. Its shares have risen 3.3% in the past year.
The Zacks Consensus Estimate for MANH’s 2024 EPS is pegged at $4.26. MANH’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average surprise being 26.6%. The stock has surged 28.4% in the past year.