May 14, 2019

CRUS – Given management’s confidence in microphone shipments, product development, and margins, 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 16.7x 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 the progress of microphone shipments, the potential of product development, and gross margins, justifying outperformance going forward
  • Specifically, management is confident in the progress of their microphone shipments and voice biometric security standards enhancement. Moreover, they are confident in the potential of their new Android product development activities, and in their ability to enter businesses that maintain their gross margins.
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