Paul Tudor Jones sees potential market rally after late October
On Wednesday, Benchmark reiterated its Buy rating on Cirrus Logic (NASDAQ:CRUS) stock with a maintained price target of $125.00. The endorsement follows a series of virtual meetings and a group investor call hosted by the firm last week, which reinforced a positive outlook for the company’s revenue growth strategy. According to InvestingPro data, Cirrus Logic currently trades at an attractive P/E ratio of 17.6x relative to its growth potential, with analysts’ targets ranging from $115 to $140. The company’s focus on diversifying its end markets was highlighted, with particular optimism expressed for the PC sector, where Cirrus Logic sees a largely untapped opportunity and a growing list of design wins.
Cirrus Logic, a supplier of analog and mixed-signal processing circuits with a market capitalization of $5.36 billion, continues to prioritize Apple (NASDAQ:AAPL) as its primary customer. The relationship with Apple offers potential for new areas of socket capture and ongoing content expansion. The company maintains impressive gross margins of 52.2% and holds more cash than debt on its balance sheet, demonstrating strong financial management. The Benchmark analyst noted the enthusiasm for Cirrus Logic’s prospects in the PC space, which presents a significant opportunity for growth.
Additionally, the automotive sector is showing signs of momentum for Cirrus Logic, following the introduction of new products last year. The company is poised to engage in various domains within the automotive industry, including timing, audio, and haptics.
Despite the lack of immediate catalysts that could significantly boost the stock price in the short term, Benchmark’s analysis suggests that Cirrus Logic’s improved end market mix will likely mitigate seasonal and customer volatility. This diversification is expected to support sustainable revenue growth and earnings leverage over the long term, indicating a positive trajectory for the company’s financial performance.
Investors are keeping an eye on Cirrus Logic as it continues to advance its diversification strategy and capitalize on new opportunities across different market segments. The maintained price target of $125 by Benchmark reflects confidence in the company’s strategic direction and its potential for long-term growth.
In other recent news, Cirrus Logic reported fiscal third-quarter earnings and revenue that exceeded Wall Street expectations. The company posted adjusted earnings per share of $2.51, which was $0.48 higher than the analyst consensus estimate of $2.03. Revenue reached $555.7 million, surpassing the anticipated $521.44 million. This strong performance was attributed to higher-than-expected shipments into smartphones, particularly the demand for its latest-generation custom boosted amplifier and smart codec. Cirrus Logic’s laptop business also gained momentum, with its products being featured in Intel (NASDAQ:INTC)’s Arrow Lake reference design. Looking ahead to the fourth quarter, Cirrus Logic expects revenue between $350 million and $410 million, while analysts have estimated $379.8 million. These developments have captured the attention of investors and analysts alike.
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