Cirrus Logic Intrinsic Value – Loop Capital Downgrades Cirrus Logic Amid Challenges in Demand
June 19, 2023
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Loop Capital has recently downgraded Cirrus Logic ($NASDAQ:CRUS), a publicly traded company that designs, develops, and markets analog and mixed-signal integrated circuits. Loop Capital’s decision to downgrade Cirrus Logic is due to challenges the company has faced in terms of demand for their products. This has caused their stock to decline and greatly impaired their overall performance. The company focuses on developing innovative semiconductor solutions for a variety of marketplaces, including consumer, industrial, automotive, audio, and computing.
Over the years, they have achieved great success in providing customers with reliable and high performance analog and mixed-signal products. Unfortunately, due to the challenges in demand they are now facing, Loop Capital has made the decision to downgrade Cirrus Logic.
Stock Price
On Monday, Loop Capital, an investment banking and asset management firm, downgraded the stock of CIRRUS LOGIC from “hold” to “sell” due to the challenges in demand. This downgrade prompted investors to sell, resulting in the stock opening at $76.0 and closing at $77.0, down 1.4% from its previous closing price of $78.1. Loop Capital noted that CIRRUS LOGIC’s demand has been suffering due to the challenging market environment and the company’s inability to keep pace with industry trends and customer requirements. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Cirrus Logic. More…
| Total Revenues | Net Income | Net Margin |
| 1.9k | 176.7 | 12.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Cirrus Logic. More…
| Operations | Investing | Financing |
| 339.57 | -33.33 | -230.27 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Cirrus Logic. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.06k | 405.68 | 31.09 |
Key Ratios Snapshot
Some of the financial key ratios for Cirrus Logic are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 14.0% | 20.9% | 18.2% |
| FCF Margin | ROE | ROA |
| 16.0% | 12.8% | 10.5% |
Analysis – Cirrus Logic Intrinsic Value
At GoodWhale, we have conducted an in-depth analysis of CIRRUS LOGIC‘s fundamentals to assess the company’s true worth. Our proprietary Valuation Line method has determined that the fair value of a CIRRUS LOGIC share is around $97.2. Currently, the stock is trading at $77.0, which means it is undervalued by 20.7%. This presents an opportunity for savvy investors to buy CIRRUS LOGIC stock and benefit from the potential upside. More…
Peers
The company’s competitors include Sequans Communications SA, United Microelectronics Corp, and Globetronics Technology Bhd.
– Sequans Communications SA ($NYSE:SQNS)
Sequans Communications S.A. provides wireless connectivity solutions for the Internet of Things and 4G/5G applications. The company operates in two segments, Mobile Broadband and Enterprise & IoT. It offers its solutions for cellular, Wi-Fi, and short range applications, as well as for various connected devices, including cellular routers and gateways, customer premises equipment, and automotive and transportation applications.
– United Microelectronics Corp ($TWSE:2303)
As of 2022, United Microelectronics Corp has a market cap of 501.15B and a Return on Equity of 18.27%. The company is a leading global semiconductor foundry that provides advanced technology and manufacturing services to semiconductor companies worldwide. The company’s technology platforms include: advanced process technologies, memory technologies, mixed-signal/analog technologies, and specialty technologies.
– Globetronics Technology Bhd ($KLSE:7022)
As of 2022, Globetronics Technology Bhd has a market cap of 769.86M and a Return on Equity of 11.1%. The company is engaged in the design, manufacture and sale of semiconductor products and precision components. It offers a range of services including research and development, engineering, testing and assembly.
Summary
Cirrus Logic recently faced a downgrade from Loop Capital due to demand-related challenges. Investors are advised to approach the stock cautiously as further demand-related developments could cause stock price volatility. A thorough analysis of the company’s financials, management, competitive position, and industry trends should be undertaken before investing.
Short-term investors may want to avoid the stock until further developments can be monitored. Long-term investors should consider Cirrus Logic a possible addition to their portfolio, although they should be aware of risks related to demand and other macroeconomic factors.
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