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On Monday, Stifel analysts maintained their Buy rating and $140.00 price target for Cirrus Logic (NASDAQ:CRUS), a premier supplier of high-precision analog and digital signal processing components for audio and energy markets. According to InvestingPro data, the stock appears undervalued, with analysts’ consensus showing potential upside. The company maintains excellent financial health with an overall score of 3.23 (GREAT) on InvestingPro’s comprehensive assessment framework.
The firm’s analysis indicates an expectation for Cirrus Logic’s revenue to decline by 5.9% quarter-over-quarter, which stands in contrast to the typical 18.4% seasonal increase observed over the past five years. This projection aligns with the anticipated in-line revenue outlook for the March quarter, based on Stifel’s own estimate of $357.0 million, representing a 30.0% sequential seasonal decline. Despite these near-term projections, the company maintains strong fundamentals with a healthy gross profit margin of 51.5% and robust cash flows that adequately cover its obligations.
Stifel’s outlook comes in the wake of revised expectations for Apple (NASDAQ:AAPL)’s iPhone sales, which are projected to drop by 34% quarter-over-quarter in the March quarter. It is important to note, however, that Stifel emphasizes the decline in iPhone sales does not correlate directly on a one-to-one basis with Cirrus Logic’s performance.
The analysts at Stifel further elaborated on their position, stating, "In sum, we believe this commentary supports our current revenue outlook for CRUS, coupled with a continued mix towards richer models (both iPhone 16 vs. older gens, and Pro/Max of the iPhone 16), and even as its non-iPhone business continues to broaden (laptop-optimized audio + power; pro audio data converter, AR/VR, etc.)."
This analysis suggests that despite the projected decline in iPhone sales, Cirrus Logic is expected to benefit from a shift in product mix towards higher-end models and the diversification of its business beyond just iPhone-related products. The company’s expansion into new areas such as laptop-optimized audio and power, professional audio data converters, and AR/VR technologies is seen as a positive factor in supporting its revenue outlook. For deeper insights into Cirrus Logic’s growth potential and financial metrics, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s diversification strategy and growth prospects among 1,400+ top stocks.
In other recent news, Qorvo (NASDAQ:QRVO) reported strong earnings for the third quarter of fiscal 2025, with earnings per share surpassing analyst estimates by $0.40 and revenue reaching $916.3 million. This robust performance led to an optimistic outlook for the fourth quarter, with expected earnings per share ranging from $0.90 to $1.10. Meanwhile, Cirrus Logic received a Buy rating from Loop Capital, following the company’s record Q2 revenue of $541.9 million, driven by high smartphone demand.
However, CFRA adjusted its outlook on Cirrus Logic, reducing its 12-month price target to $109 while maintaining a Hold rating. This adjustment came despite Cirrus Logic’s strong Q2 results and was due to a revised revenue outlook that fell short of CFRA’s estimate. Stifel also adjusted its price target for Cirrus Logic to $140 but maintained a Buy rating, expressing confidence in the company’s market position despite a lower revenue outlook.
On the other hand, Cirrus Logic’s second quarter of fiscal year 2025 earnings call revealed a significant increase in revenue and earnings per share, driven by strong smartphone demand. The company’s CEO, John Forsyth, discussed the strategic focus on expanding product offerings, which are expected to drive future revenue. These recent developments provide investors with a comprehensive view of the financial performance and market positioning of Qorvo and Cirrus Logic.
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