Cirrus Logic
CRUS
$153.98
-2.34%
Cirrus Logic Inc is a supplier of low-power, high-precision audio and mixed-signal components used in smartphones, PCs, AR/VR headsets, wearables, automotive, and professional audio systems. The company is a niche leader in high-fidelity audio codecs and amplifiers, with a distinct competitive identity as a key supplier to major consumer electronics brands, most notably Apple. The current investor narrative is heavily focused on the company's role as an AI smartphone play, leveraging its audio and sensing solutions for next-generation devices, which is driving attention as a potentially better-valued alternative to its larger customers, amidst ongoing discussions about customer concentration and diversification efforts.…
CRUS
Cirrus Logic
$153.98
Related headlines
Investment Opinion: Should I buy CRUS Today?
Rating & Thesis: Hold. CRUS presents a compelling but high-risk growth-at-a-reasonable-price (GARP) story, where strong fundamentals and momentum are counterbalanced by severe customer concentration, warranting a cautious stance despite bullish analyst leanings.
Supporting Evidence: The hold rating is supported by four key data points: 1) Valuation is reasonable at a trailing P/E of 17.59x and a PEG of 0.59, suggesting growth is not overpriced. 2) Profitability is excellent, with net and operating margins of 20.75% and 23.05%, respectively. 3) Financial health is pristine, evidenced by $614.5M in TTM free cash flow and minimal debt. 4) Technical momentum is strong, with a 58.4% one-year return. However, the lack of a clear analyst target upside and the limited coverage (4 analysts) reduce conviction for a full Buy rating.
Risks & Conditions: The two biggest risks are customer concentration and valuation compression after a major rally. This Hold would upgrade to a Buy if the P/E compressed below 15x on non-fundamental weakness, or if the company announced a major design win with a non-Apple customer, materially de-risking the model. It would downgrade to Sell if quarterly revenue growth turned negative or gross margins fell sustainably below 50%. Relative to its history and the narrative, the stock appears fairly valued, discounting both its strengths and its glaring risk.
Sign up to view all
CRUS 12-Month Price Forecast
CRUS is a high-quality company trapped in a high-risk business model. Its financials are exceptional, and its valuation is now reasonable, even discounting for its Apple dependence. The 12-month outlook is a tug-of-war between its operational excellence and its strategic vulnerability. The base case of range-bound trading is most likely, as the market awaits concrete evidence of diversification. The stance would upgrade to bullish on proof of reduced customer concentration or a significant pullback to the $140-$150 range, offering a better margin of safety. It would turn bearish on any confirmation of market share loss at its key account.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Cirrus Logic's 12-month outlook, with a consensus price target around $200.17 and implied upside of +30.0% versus the current price.
Average Target
$200.17
3 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
3
covering this stock
Price Range
$123 - $200
Analyst target range
Analyst coverage for CRUS is limited, with only 4 analysts providing estimates, which is typical for a mid-cap semiconductor company with significant customer concentration. The consensus sentiment, inferred from recent institutional ratings, leans bullish, with firms like Stifel, Benchmark, and Keybanc maintaining 'Buy' or 'Overweight' ratings, while Barclays holds an 'Equal Weight'. Specific consensus price target and implied upside data are not available in the provided dataset. The target price range is also not specified, but the recent news snippet suggests a valuation argument is being made, with the stock noted as trading at 19x earnings versus Apple's 35x. The limited number of analysts and the lack of a published target range can lead to higher volatility and less efficient price discovery, placing greater onus on investors to conduct independent fundamental analysis.
Bulls vs Bears: CRUS Investment Factors
The evidence currently favors the bull case, primarily due to CRUS's combination of strong fundamentals (20.75% net margin, $614.5M FCF), reasonable valuation (17.59x P/E, 0.59 PEG), and powerful technical momentum significantly outperforming the market. However, the bear case is anchored by an extreme, non-negotiable risk: overwhelming dependence on Apple. The single most important tension in the investment debate is whether the company's robust profitability and the growth of its HPMS segment can successfully diversify the business and justify a re-rating before the perennial customer concentration risk materializes. The stock's derated multiple suggests the market is heavily discounting for this risk, creating the potential opportunity.
Bullish
- Strong Profitability & Cash Flow: The company generates robust net margins of 20.75% and substantial free cash flow of $614.5M TTM. This financial strength, coupled with a pristine balance sheet (debt-to-equity of 0.063), provides significant resources for share buybacks and strategic investments without financial risk.
- Attractive Valuation vs. Growth: CRUS trades at a trailing P/E of 17.59x, a significant discount to its historical peak of 40.51x seen in Q1 2024. The PEG ratio of 0.59, based on this P/E and implied growth, suggests the stock is undervalued relative to its earnings growth potential.
- Powerful Technical & Relative Momentum: The stock is in a sustained uptrend, up 58.41% over the past year and 36.45% over six months, significantly outperforming the S&P 500 by 33.4% and 26.7% over those periods, respectively. Trading at 91.5% of its 52-week high ($180.42) confirms strong bullish momentum.
- Diversifying Growth in HPMS Segment: While Audio remains core, the High-Performance Mixed Signal (HPMS) segment generated $236.2M last quarter, representing a key growth vector. This diversification beyond core audio into sensing, haptics, and power management reduces long-term reliance on a single product line.
Bearish
- Extreme Customer Concentration Risk: The company's identity is tied to being a key supplier to Apple, with roughly half its revenue generated in China, a primary manufacturing hub for its largest customer. Any design loss or volume reduction from Apple would have a catastrophic impact on revenue and profitability.
- Limited Analyst Coverage & Visibility: Only 4 analysts cover the stock, leading to less efficient price discovery and higher potential for volatility. The lack of a clear consensus price target or implied upside percentage in the data increases uncertainty for investors relying on sell-side research.
- Valuation Compression Despite Growth: The trailing P/E has compressed from over 40x to ~17.5x, indicating the market has derated the stock. This suggests skepticism about the sustainability of its growth or a perception that past multiples were unjustified, posing a risk of further multiple contraction.
- Elevated Price Near 52-Week High: Trading at $165.29, just 8.4% below its 52-week high of $180.42, leaves limited near-term upside before hitting technical resistance. This elevated position increases vulnerability to a profit-taking pullback, especially given its beta of 1.143, which implies above-market volatility.
CRUS Technical Analysis
The stock is in a powerful, sustained uptrend, evidenced by a 1-year price change of +58.41% and a 6-month gain of +36.45%. As of the latest close of $165.29, the price is trading at approximately 91.5% of its 52-week high of $180.42, positioning it near the upper bound of its range, which signals strong momentum but also raises concerns about potential overextension. Recent momentum shows acceleration, with a 3-month gain of +21.47% and a 1-month gain of +2.58%, though the shorter-term pace has moderated slightly compared to the explosive gains seen earlier in the year, such as the rally from $120 to nearly $180 between January and April. The stock's beta of 1.143 indicates it is about 14% more volatile than the broader market, which is a relevant consideration for risk management given its current elevated position. Key technical levels are clear: immediate resistance is at the 52-week high of $180.42, while major support lies at the 52-week low of $92.02; a decisive breakout above $180 would confirm the bullish trend's continuation, whereas a breakdown below the recent consolidation range around $160 could signal a deeper correction.
Beta
1.14
1.14x market volatility
Max Drawdown
-15.9%
Largest decline past year
52-Week Range
$92-$180
Price range past year
Annual Return
+43.1%
Cumulative gain past year
| Period | CRUS Return | S&P 500 |
|---|---|---|
| 1m | -13.6% | -2.2% |
| 3m | +7.4% | +15.8% |
| 6m | +27.4% | +6.4% |
| 1y | +43.1% | +20.9% |
| ytd | +28.7% | +7.7% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
CRUS Fundamental Analysis
Revenue growth is robust and accelerating, with the most recent quarterly revenue of $580.62 million representing a 4.48% year-over-year increase, and sequential growth from $560.96 million in the prior quarter. The Audio Products segment, at $344.46 million, remains the larger driver, but the High-Performance Mixed Signal (HPMS) segment at $236.17 million is a key growth vector for diversification. The company is highly profitable, with net income of $140.31 million in the latest quarter and a trailing net margin of 20.75%. Gross margin remains healthy at 53.07% for the quarter, and operating margin stands at 23.05%, indicating efficient operations and pricing power within its niche. The balance sheet is exceptionally strong, with a debt-to-equity ratio of only 0.063, indicating minimal financial leverage, and a robust current ratio of 7.37, signifying ample liquidity. Free cash flow generation is substantial, with TTM free cash flow of $614.54 million, providing the company with significant internal resources to fund growth, repurchase shares (as evidenced in cash flow statements), and navigate cycles without reliance on external financing.
Quarterly Revenue
$580624000.0B
2025-12
Revenue YoY Growth
+0.04%
YoY Comparison
Gross Margin
+0.53%
Latest Quarter
Free Cash Flow
$614544000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is CRUS Overvalued?
Given the company's consistent profitability with net income of $140.31 million, the primary valuation metric is the P/E ratio. The trailing P/E is 17.59x, closely aligned with the forward P/E of 17.61x, suggesting the market's growth expectations are stable and already priced in, with no significant multiple expansion anticipated in the near term. Compared to the broader semiconductor industry, a trailing P/E in the high-teens is generally reasonable, though specific industry average data is not provided in the inputs for a precise premium/discount calculation. Historically, the stock's own valuation has compressed significantly; its current trailing P/E of 17.59x is well below its historical peaks seen in recent years, such as the 40.51x recorded in Q1 2024, indicating the market has derated the stock despite improved fundamentals, potentially presenting a value opportunity if growth persists.
PE
17.7x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range -28x~69x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: CRUS's primary financial risk is not leverage or liquidity—its balance sheet is fortress-like with a 0.06 debt-to-equity ratio and a 7.37 current ratio—but extreme revenue concentration. Roughly half its revenue comes from China, heavily linked to Apple's supply chain, making earnings volatile and dependent on a single customer's product cycles. While net margins are strong at 20.75%, they could compress rapidly if pricing power erodes due to competitive pressure or customer consolidation. The company's valuation itself is a risk; the P/E has compressed from over 40x to 17.6x, and further derating is possible if growth decelerates.
Market & Competitive Risks: The stock trades at a premium to its recent historical average after a 58% one-year run, increasing valuation compression risk if the 'AI smartphone' narrative cools. Its beta of 1.143 confirms it is 14% more volatile than the market, amplifying downside during sector-wide selloffs. Competitively, as a niche supplier, it faces constant risk of design displacement by larger, integrated semiconductor firms or in-sourcing by customers like Apple. Regulatory and geopolitical risks are heightened due to its significant China exposure, potentially impacting supply chains and market access.
Worst-Case Scenario: The worst-case scenario is a loss of a key design socket in a future Apple iPhone or a severe downturn in Apple's smartphone volumes, compounded by a broader semiconductor downturn. This could trigger a simultaneous earnings collapse and multiple compression. The realistic downside could see the stock re-test its 52-week low of $92.02, representing a potential loss of approximately -44% from the current price of $165.29. Such a drawdown is plausible given the stock's historical volatility and the binary nature of its customer relationships.
FAQ
The key risks, in order of severity, are: 1) Customer Concentration: Roughly half of revenue is tied to Apple's supply chain, making the business vulnerable to a single customer's decisions. 2) Valuation Compression: After a 58% one-year rally, the stock is near its high, and its P/E has already compressed from 40x; further derating is possible. 3) Competitive Displacement: Risk of losing design sockets to larger chipmakers or in-sourcing. 4) Geopolitical & Macro: Significant China exposure and a beta of 1.143 make it sensitive to trade tensions and market downturns.
The 12-month forecast presents three scenarios. The Base Case (50% probability) sees the stock trading between $155 and $175, assuming steady execution with Apple and mid-single-digit growth. The Bull Case (30% probability) targets $180 to $200, driven by AI smartphone success and diversification breakthroughs. The Bear Case (20% probability) warns of a drop to $92-$130 if Apple demand weakens or market share is lost. The Base Case is most likely, hinging on the assumption that the status quo—profitable dependence on Apple—persists.
CRUS appears fairly valued relative to its current risk profile. The trailing P/E of 17.59x is a significant discount to its historical peak of over 40x and to Apple's ~35x, as noted in recent news. The PEG ratio of 0.59 suggests it is undervalued based on growth, but this likely reflects the market's heavy discount for customer concentration risk. Compared to the broader semiconductor industry, a high-teens P/E is reasonable. The valuation implies the market expects steady, single-digit growth but is not pricing in any major diversification success or multiple expansion.
CRUS is a good buy for investors seeking exposure to the premium semiconductor space with a higher risk/reward profile. Its fundamentals are strong (20.75% net margin, $614.5M FCF), and its valuation at 17.6x P/E is reasonable relative to its growth. However, it is not a good buy for risk-averse investors due to its extreme dependence on Apple, which creates potential for a -44% drawdown to its 52-week low. It is best suited for those who believe the HPMS diversification story and are comfortable with the associated volatility.
CRUS is more suitable for a medium- to long-term investment horizon of 2-3 years. Its short-term prospects are clouded by its position near a 52-week high and quarterly dependence on Apple's cycle, making it volatile for trading (beta 1.143). A longer horizon allows time for its diversification efforts in the HPMS segment to potentially bear fruit, which is critical for the long-term thesis. The company does not pay a dividend, eliminating it as an income stock. Investors should be prepared to hold through volatility to capture the growth story.