Shareholders might have noticed that Cirrus Logic, Inc. (NASDAQ:CRUS) filed its full-year result this time last week. The early response was not positive, with shares down 7.1% to US$72.74 in the past week. It looks like a credible result overall – although revenues of US$1.3b were in line with what the analysts predicted, Cirrus Logic surprised by delivering a statutory profit of US$2.64 per share, a notable 12% above expectations. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Cirrus Logic

NasdaqGS:CRUS Past and Future Earnings May 6th 2020
Following the recent earnings report, the consensus from ten analysts covering Cirrus Logic is for revenues of US$1.19b in 2021, implying a noticeable 7.1% decline in sales compared to the last 12 months. Statutory earnings per share are expected to dive 23% to US$2.11 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.24b and earnings per share (EPS) of US$2.54 in 2021. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
The analysts made no major changes to their price target of US$82.11, suggesting the downgrades are not expected to have a long-term impact on Cirrus Logic’svaluation. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Cirrus Logic analyst has a price target of US$95.00 per share, while the most pessimistic values it at US$65.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cirrus Logic’s past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 7.1%, a significant reduction from annual growth of 2.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Cirrus Logic is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$82.11, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn’t be too quick to come to a conclusion on Cirrus Logic. Long-term earnings power is much more important than next year’s profits. We have forecasts for Cirrus Logic going out to 2022, and you can see them free on our platform here.
You should always think about risks though. Case in point, we’ve spotted 1 warning sign for Cirrus Logic you should be aware of.
If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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