Cirrus Logic, Inc.
) are on a great run, buoyed by strong fourth quarter results
announced on April 25, 2012. This fabless semiconductor company has
a Zacks #1 Rank (Strong Buy).
Currently, the stock is trading around its 52-week high. However,
there are chances of further upside based on Cirrus' projection of
solid growth during the second half of fiscal 2013.
Earnings Beat, Outlook Upbeat
Cirrus Logic reported fiscal fourth quarter 2012 earnings per share
of 41 cents, beating the Zacks Consensus Estimate by more than 36%.
Net sales jumped 21.0% over the comparable prior-year quarter to
$110.6 million, inching past the Zacks Consensus Estimate of $110.0
million. Audio Products were the high point, growing 35.2% from the
The gross margin improved 610 bps from the year-ago quarter to
56.4%. The operating margin increased 400 bps year over year to
Cirrus remains upbeat about its growth in fiscal 2013, which should
benefit from new audio and energy products.
The fiscal first quarter revenue guidance of $96.0 million to
$106.0 million represents management's conservatism. Since the
company will launch some new products later in the year, customers
are likely to delay purchases, leading to a temporary softening in
demand. Therefore, any pullback in the shares on account of this
softness represents an excellent buying opportunity.
Following the earnings release, the Zacks Consensus Estimate for
the fiscal first quarter has dropped 44.8% to 16 cents, but the
estimate for fiscal 2013 shot up 8.9% to $1.50.
Valuation Looks Reasonable
Currently, Cirrus is trading at a premium to most of its peers
based on P/E, P/S and PEG. Its strong growth prospects indicate
room for further expansion.
Cirrus shares are up 79.8% year to date, compared to a mere 5.2%
increase for the S&P 500.
Cirrus shares have traded at a premium to rivals Texas Instruments
), STMicroelectronics (
), ON Semiconductor (
) and Maxim Integrated Products (
) year to date.
The significant increase in the stock price in recent months is on
account of strong demand for its analog and mixed-signal integrated
circuits (IC) for audio products and its rumored win with Apple TV.
The stock is currently above its 50 and 200 day moving averages of
27.09 and 22.35, respectively.
Trading volumes are considerably lower than its peers.
Cirrus Logic designs ICs for the audio and energy markets. The
major contributor to the company's revenue is its audio product
portfolio. Audio products generate 85.0% of total revenue, while
only 15.0% comes from Energy products.
Cirrus has a strong customer base, but the prime customer is Apple
with 62.0%, 47.0% and 35.0% revenue contributions in 2012, 2011 and
2010, respectively. The company employs 676 full time employees.
CIRRUS LOGIC (CRUS): Free Stock Analysis Report
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