CRUS – Given management’s confidence in their ability to capitalize on increased demand and opportunities, bearish market expectations are unwarranted and upside is likely

• Cirrus Logic Inc. (CRUS:USA)trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 10.8x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, which may be unwarranted given management’s confidence in their ability to capitalize on increasing demand, overcoming challenges with their second biggest customer, and opportunities in the stereo market. As such, outperformance is likely justified
• Specifically, management is confident in their ability to capitalize on increasing demand for compelling audio and voice components. Additionally, they are confident in their ability to counteract challenges facing their second largest customer and in their growing number of opportunities for stereo going forward