On Tuesday, Loop Capital began its coverage of Cirrus Logic (NASDAQ:CRUS) shares, a semiconductor company, with a Buy rating and a price target set at $130. The initiation comes as the firm takes over from previous analyst coverage and follows the company's second-quarter results for fiscal year 2025, which ended in September.
The new coverage is replacing that of Ananda Baruah, with Loop Capital's analyst stepping in to provide fresh perspectives on Cirrus Logic's financial outlook. The firm has released a new model and a series of estimates, which align with the maintained Buy rating and the established price target.
Cirrus Logic, known for its expertise in low-power, high-precision mixed-signal processing solutions, has been the subject of analytical interest following its recent quarterly financial disclosures. The company's performance and future projections are key factors in Loop Capital's evaluation and subsequent Buy rating.
The analyst at Loop Capital expressed confidence in the company's trajectory by stating, "We are assuming coverage of Cirrus Logic from Ananda Baruah. As part of this process, and following 2Q25 (Sep) results, we are publishing a new model and a new series of estimates. We stick with our Buy rating, and we maintain our $130 PT." This statement underscores the firm's positive outlook on Cirrus Logic's market position and potential for growth.
Investors and market watchers will be keeping a close eye on Cirrus Logic's stock performance in light of this new coverage and the reaffirmed price target. The company's strategic initiatives and financial results will continue to be significant factors in its valuation and the investment community's sentiment.
In other recent news, Cirrus Logic has been making significant strides in its financial performance and strategic market positioning. The semiconductor company reported a record Q2 revenue of $541.9 million for fiscal year 2025, a 45% sequential rise and a 13% growth compared to the same period last year, primarily driven by robust smartphone demand.
However, the company's Q3 FY 2025 revenue outlook was adjusted to 12.4% lower than Stifel's estimate due to factors such as an extra week in FY 2024 and unusually high Android production in Q3 FY 2024.
Despite the lowered revenue outlook, both CFRA and Stifel maintained their ratings on Cirrus Logic's shares, with CFRA reducing the price target to $109 and Stifel revising the price target to $140. Cirrus Logic has also entered the laptop market and launched new products including a next-generation custom boosted amplifier and a 22-nanometer smart codec.
These recent developments are expected to contribute to future revenue streams. Looking ahead, Cirrus Logic is forecasting significant growth in FY '26, with revenue from PC-focused products expected to be in the low tens of millions. Despite potential seasonal fluctuations, the company remains optimistic about its growth trajectory.
InvestingPro Insights
Loop Capital's bullish stance on Cirrus Logic (NASDAQ:CRUS) is further supported by several key metrics and insights from InvestingPro. The company's financial health appears robust, with InvestingPro data showing a market capitalization of $5.56 billion and a P/E ratio of 17.07, suggesting a relatively attractive valuation compared to its earnings.
InvestingPro Tips highlight that Cirrus Logic holds more cash than debt on its balance sheet, indicating strong financial stability. This aligns well with Loop Capital's positive outlook and could provide the company with flexibility for future growth initiatives or to weather potential market uncertainties.
Another relevant InvestingPro Tip notes that Cirrus Logic is trading at a low P/E ratio relative to its near-term earnings growth. This observation supports Loop Capital's Buy rating and $130 price target, suggesting potential upside for investors.
For those seeking a more comprehensive analysis, InvestingPro offers 8 additional tips on Cirrus Logic, providing a deeper understanding of the company's financial position and market performance.
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