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Cirrus Logic (CRUS) Down 13.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Cirrus Logic (CRUS - Free Report) . Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cirrus Logic due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cirrus Logic delivered strong first-quarter fiscal 2023 results, with the top and bottom lines surpassing the Zacks Consensus Estimate and increasing year over year.
The company reported adjusted earnings of $1.12 per share, beating the Zacks Consensus Estimate by 31.8%. The bottom line rose 107% from the prior-year quarter’s 54 cents.
Top-Line Details
Total revenues of $394 million surpassed the Zacks Consensus Estimate by 6.3% and increased 42% year over year.
Along with increasing investments in R&D, Cirrus Logic is accelerating sales momentum and executing strategic initiatives, which will help achieve sustainable growth over the next year. As part of its strategic initiatives, the company is focused on strengthening its presence in the technology sector and broadening end-market exposure.
The Texas-based company rearranged its reportable segments and created a separate category in fourth-quarter fiscal 2021, High-Performance Mixed-Signal and Audio. Cirrus Logic is expanding into other applications such as laptops, gaming, tablets and AR/VR.
Cirrus Logic’s High-Performance Mixed-Signal segment includes a few of its non-audio products. It contributed 35% to total revenues in the fiscal first quarter. Revenues from the same division surged 132% year over year to $139.1 million on higher mixed-signal content gains along with a higher average selling price.
The Audio segment’s sales increased 17.1% to $254.5 million and contributed 65% to the total revenues.
Margins
Non-GAAP gross margin was 51.5% which expanded 90 basis points (bps) on a year-over-year basis.
Cirrus Logic’s non-GAAP operating expenses rose 15.9% year over year to $119.5 million.
Non-GAAP operating income of $83.4 million increased 125% year over year. Moreover, the non-GAAP operating profit margin increased to 21.2% from 13.4% reported in the year-ago quarter.
Balance Sheet and Cash Flow
The company exited the fiscal first quarter with cash and marketable securities of $379.3 million compared with the $369.8 million as of Mar 26, 2022.
As of Jun 25, 2022, Accounts receivables were $206.3 million compared with $240 million recorded as of Mar 26, 2022.
In the fiscal first quarter, the company reported $74.4 million as net cash provided from operations.
The company repurchased 724,871 shares worth $56.4 million in the quarter under review. As of Jun 25, 2022, the company has $136.1 million worth of shares remaining under its existing share repurchase authorization. The company also announced an additional share buyback worth $500 million.
Outlook
For second-quarter 2023, the company projects revenues between $450 million and $490 million. R&D and SG&A are projected to be between $154 million and $160 million. The gross margin is expected to be 49-51%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.2% due to these changes.
VGM Scores
At this time, Cirrus Logic has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cirrus Logic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Cirrus Logic (CRUS) Down 13.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Cirrus Logic (CRUS - Free Report) . Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cirrus Logic due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cirrus Logic’s Q1 Earnings & Revenues Beat Estimates
Cirrus Logic delivered strong first-quarter fiscal 2023 results, with the top and bottom lines surpassing the Zacks Consensus Estimate and increasing year over year.
The company reported adjusted earnings of $1.12 per share, beating the Zacks Consensus Estimate by 31.8%. The bottom line rose 107% from the prior-year quarter’s 54 cents.
Top-Line Details
Total revenues of $394 million surpassed the Zacks Consensus Estimate by 6.3% and increased 42% year over year.
Along with increasing investments in R&D, Cirrus Logic is accelerating sales momentum and executing strategic initiatives, which will help achieve sustainable growth over the next year. As part of its strategic initiatives, the company is focused on strengthening its presence in the technology sector and broadening end-market exposure.
The Texas-based company rearranged its reportable segments and created a separate category in fourth-quarter fiscal 2021, High-Performance Mixed-Signal and Audio. Cirrus Logic is expanding into other applications such as laptops, gaming, tablets and AR/VR.
Cirrus Logic’s High-Performance Mixed-Signal segment includes a few of its non-audio products. It contributed 35% to total revenues in the fiscal first quarter. Revenues from the same division surged 132% year over year to $139.1 million on higher mixed-signal content gains along with a higher average selling price.
The Audio segment’s sales increased 17.1% to $254.5 million and contributed 65% to the total revenues.
Margins
Non-GAAP gross margin was 51.5% which expanded 90 basis points (bps) on a year-over-year basis.
Cirrus Logic’s non-GAAP operating expenses rose 15.9% year over year to $119.5 million.
Non-GAAP operating income of $83.4 million increased 125% year over year. Moreover, the non-GAAP operating profit margin increased to 21.2% from 13.4% reported in the year-ago quarter.
Balance Sheet and Cash Flow
The company exited the fiscal first quarter with cash and marketable securities of $379.3 million compared with the $369.8 million as of Mar 26, 2022.
As of Jun 25, 2022, Accounts receivables were $206.3 million compared with $240 million recorded as of Mar 26, 2022.
In the fiscal first quarter, the company reported $74.4 million as net cash provided from operations.
The company repurchased 724,871 shares worth $56.4 million in the quarter under review. As of Jun 25, 2022, the company has $136.1 million worth of shares remaining under its existing share repurchase authorization. The company also announced an additional share buyback worth $500 million.
Outlook
For second-quarter 2023, the company projects revenues between $450 million and $490 million. R&D and SG&A are projected to be between $154 million and $160 million. The gross margin is expected to be 49-51%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.2% due to these changes.
VGM Scores
At this time, Cirrus Logic has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cirrus Logic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.