Cirrus Logic Stock Could Outperform in 2021

Expect Cirrus stock to benefit from Apple's iPhone sales

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Cirrus Logic, Inc. (NASDAQ:CRUS) is an American supplier of semiconductors and processors. The have an intellectual property portfolio of more than 3,530 pending and issued patents worldwide. Moreover, Cirrus has over 3,200 customers including big names like Ford (F), Samsung, SiriusXM (SIRI), Sony (SNE), and Apple (AAPL).

Cirrus stock scored a record high of $103.25 back on Jan. 20. And while the shares have pulled back some since, their 20-day moving average has so far contained the damage. In the last 12 months, CRU is up 15%.

CRUS Stock Chart

Cirrus will report its fourth-quarter earnings after the market closes on Monday, Feb. 1. But the best gains that resulted in were pops of 3.9% in November and 2.6% back in January 2020. In the last eight quarters, CRUS has averaged a post-earnings move of 6.7%, regardless of direction. For Tuesday, options traders are pricing in a larger-than-normal move of 11.5%.

In terms of stock value, Cirrus appears to be on the higher end of the spectrum. Cirrus stock sports a price-earnings ratio of 36.28. However, that figure is projected to come down to 23.26, making CRUS a much more attractive value play in the near future.

Cirrus has generated over $1.2 billion in revenue and $156 million in net income this past year. The company also has a great balance sheet that boasts twice as much cash as it has in debt. Overall, the company has solid fundamentals and should see some nice gains from Apple’s new iPhone 12 sales. Apple is, by far, Cirrus Logic’s biggest customer, putting the company in a prime position to outperform expectations for its earnings and revenue over the next 12 months.


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