Cirrus Logic Inc. (CRUS - Free Report) is set to report first-quarter fiscal 2017 results on Jul 27. Last quarter, the company posted a positive earnings surprise of 92.9%. Let us see how things are shaping up for this announcement.
Factors at Play
Cirrus Logic is a premier supplier of high-performance analog circuits and advanced mixed-signal chip solutions. The company posted better-than-expected fourth-quarter fiscal 2016 results. The year-over-year comparisons were however unfavorable.
Notably, as per revenue segments, Portable audio product revenues accounted for approximately 80% of the total revenue last quarter. Also, Cirrus Logic generates a significant portion (approximately 70%) of its revenues from Apple Inc. (AAPL - Free Report) . This means that there is always a risk of losing an Apple design contract, which will significantly hurt the company’s financials.
We remain cautious about the company as the current global economic downturn might affect its business potential, going forward. Moreover, the company faces competition from the likes of Texas Instruments Inc. and STMicroelectronics, which remains a headwind.
Nonetheless, continued investments in the audio segment are expected to have a positive impact in the long run.Additionally, synergies from acquisitions and expansion in the LED market continue to drive growth.
Earnings Whispers?
Our proven model does not conclusively show that Cirrus Logic will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 17 cents. Hence, the difference is 0.00%.
Zacks Rank: Cirrus Logic’s Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are a couple of companies, which, as per our model, have the right combination of elements to post an earnings beat this quarter:
Garmin Ltd. (GRMN - Free Report) with an Earnings ESP of +4.48% and a Zacks Rank #3
Amazon.com, Inc. (AMZN - Free Report) with Earnings ESP of +37.72% and a Zacks Rank #3
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Cirrus Logic Inc. (CRUS - Free Report) is set to report first-quarter fiscal 2017 results on Jul 27. Last quarter, the company posted a positive earnings surprise of 92.9%. Let us see how things are shaping up for this announcement.
Factors at Play
Cirrus Logic is a premier supplier of high-performance analog circuits and advanced mixed-signal chip solutions. The company posted better-than-expected fourth-quarter fiscal 2016 results. The year-over-year comparisons were however unfavorable.
Notably, as per revenue segments, Portable audio product revenues accounted for approximately 80% of the total revenue last quarter. Also, Cirrus Logic generates a significant portion (approximately 70%) of its revenues from Apple Inc. (AAPL - Free Report) . This means that there is always a risk of losing an Apple design contract, which will significantly hurt the company’s financials.
We remain cautious about the company as the current global economic downturn might affect its business potential, going forward. Moreover, the company faces competition from the likes of Texas Instruments Inc. and STMicroelectronics, which remains a headwind.
Nonetheless, continued investments in the audio segment are expected to have a positive impact in the long run.Additionally, synergies from acquisitions and expansion in the LED market continue to drive growth.
Earnings Whispers?
Our proven model does not conclusively show that Cirrus Logic will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 17 cents. Hence, the difference is 0.00%.
Zacks Rank: Cirrus Logic’s Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are a couple of companies, which, as per our model, have the right combination of elements to post an earnings beat this quarter:
Garmin Ltd. (GRMN - Free Report) with an Earnings ESP of +4.48% and a Zacks Rank #3
Amazon.com, Inc. (AMZN - Free Report) with Earnings ESP of +37.72% and a Zacks Rank #3
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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