What Cirrus Logic’s latest quarter tells you

Cirrus Logic (CRUS) just reported record Q1 revenue of about $460 million with record GAAP EPS of $1.47, backed by strong smartphone audio demand and expanding high performance mixed signal products.

The company paired those results with Q2 revenue guidance of $510 million to $570 million, a new capacity reservation agreement with GlobalFoundries for 2027 and 2028, and ongoing share buybacks funded from a cash balance of about $1.2 billion and no debt.

Despite record results, Cirrus Logic’s recent share price performance has cooled. The 30 day share price return is down about 15% and the 90 day share price return is down about 27%. However, the 1 year total shareholder return of about 20% and the 3 year total shareholder return of about 55% suggest longer term holders have still seen meaningful gains.

If strong semiconductor earnings and AI related audio and mixed signal themes interest you, this is a good moment to look at 55 AI infrastructure stocks

Cirrus Logic’s business looks strong, supported by record revenue, healthy cash and active buybacks, yet the share price has pulled back sharply in recent months. So are you looking at quality on sale or a stock already fairly priced?

Most Popular Narrative: 32.2% Undervalued

Cirrus Logic’s most followed narrative puts fair value at $184.25, compared with the last close of $124.92, which points to a sizeable valuation gap.

Cirrus Logic is expanding beyond its core smartphone audio business by increasing the value and breadth of its high-performance mixed signal solutions, particularly in areas like camera controllers, battery/power management, and sensing. This strategic diversification positions the company to capture new revenue streams and reduce customer concentration risk, which can drive higher revenue growth and bolster earnings stability over time.

Want to see what sits behind that $184.25 figure? The most followed narrative leans heavily on measured revenue growth, firm margins and a richer earnings multiple. Curious how those three ingredients combine to justify a double digit discount and a higher future P/E without stretching assumptions?

Result: Fair Value of $184.25 (UNDERVALUED)

However, the Cirrus Logic story still leans heavily on a few large smartphone customers, and long term wafer commitments could become a risk if demand softens.

Next Steps

Given the mix of strong Cirrus Logic fundamentals and the recent share price pullback, sentiment is clearly divided. Act while the data is fresh and weigh both sides for yourself with 3 key rewards and 2 important warning signs

Looking for more investment ideas beyond Cirrus Logic?

Do not stop with Cirrus Logic. Use these focused stock ideas to pressure test your portfolio, spot fresh opportunities and avoid missing setups others might overlook.

• Target potential mispricing by scanning 51 high quality undervalued stocks that combine solid fundamentals with prices that do not fully reflect their underlying businesses.
• Strengthen your income stream by reviewing 8 dividend fortresses that pair higher yields with a focus on consistency.
• Prioritise resilience by checking 79 resilient stocks with low risk scores that score well on stability so sharp drawdowns do not catch you off guard.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.