Cirrus Logic’s 4Q Results Disappoint; Shares Fall

Shares of Cirrus Logic Inc. (CRUS) crashed 13.7% on Friday after the company posted disappointing results in the fiscal fourth quarter. The fabless semiconductor supplier reported revenues of $293.5 million, up 5% year-on-year but missing consensus estimates of $302.5 million. Non-GAAP diluted EPS of $0.66 per share came in below analysts’ estimates of $0.71 per share.

Cirrus Logic’s CEO, John Forsyth said, “In FY21 the company delivered solid revenue, operating profit and EPS growth, driven by both content gains and higher unit volumes. In the past year we increased the penetration of our audio solutions in smartphones, expanded the range of end products containing our audio and haptic components and made significant progress diversifying our mixed-signal product portfolio with key product launches in new areas.”

“While supply constraints had some impact on our Q4 revenue results and Q1 outlook, we have a really exciting pipeline of new components ramping this year, and expect revenue growth to accelerate in FY22.” Forsyth added.

In the fiscal first quarter of FY22, CRUS expects revenues to land between $240 million and $280 million and GAAP gross margin of between 49% and 51%. The company also said that from the first quarter of FY22, sales will be split into two categories: audio and high-performance mixed-signal. (See Cirrus Logic stock analysis on TipRanks)

Following the earnings, Oppenheimer analyst Rick Schafer assigned a Hold to the stock. Schafer said in a note to investors, “In our view, the softer F1Q outlook fits w/seasonal norms and was well telegraphed by Apple and others. We believe CRUS has secured a power conversion socket win in at least some new iPhone SKUs this year. We estimate $1.00 ASP and total incremental revenues of $75M-$100M, largely baked into CY21 forecasts.”

“CRUS also has content from camera controller (~$0.50) offsetting content loss from the removal of in-box headset. GM declined 130ps Q/Q to 50.5% and expected flat in F1Q. Customer concentration and limited upside keep us sidelined,” Schafer added.

Shares have tumbled 14.8% in the past five days.

Overall, consensus among analysts is that CRUS is a Moderate Buy based on 3 Buys and 3 Holds. The average analyst price target of $98.75 implies upside potential of about 32.7% from current levels.

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