Research

CRUS – Given management’s confidence about demand and their Cipher acquisition, bearish market expectations are unwarranted, and upside is likely

  • Cirrus Logic, Inc. (CRUS:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 17.5x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, which may be unwarranted given management’s confidence about demand for their DACs and their Cipher acquisition, justifying outperformance going forward
  • Specifically, management is confident about the popularity of their wireless earbud codecs and that their customers have demand for them to develop microphones. Furthermore, they are confident they have strong Android customers globally and that there is demand for higher quality speakers on phones. Finally, management is confident about the value their Cipher acquisition has brought to the company.