A month has gone by since the last earnings report for Cirrus Logic (CRUS Quick QuoteCRUS - Free Report) . Shares have lost about 8.4% 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? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Cirrus Logic, Inc. before we dive into how investors and analysts have reacted as of late.

Cirrus Logic Q1 Earnings Beat Estimates

Cirrus Logic reported first-quarter fiscal 2027 adjusted earnings of $1.84 per share, up 21.9% year over year and above the Zacks Consensus Estimate of $1.45. Strong demand for custom smartphone components supported the record first-quarter results.

Revenue increased 12.9% to $460 million, aligning with the consensus estimate. The strong results were primarily driven by robust shipments of custom components used in premium smartphones, showing that demand from major mobile customers remains healthy despite a competitive consumer electronics market. Quarterly revenues grew 2% sequentially as higher sales of components shipped into smartphones boosted results. Year over year, the gains from increased smartphone component demand were partly offset by previously expected pricing reductions.

Demand continued to be strong for custom boosted amplifiers and smart codecs. Cirrus anticipates these products will ship across multiple future smartphone generations. Development of the next-generation camera controller and a smart power IC for 3D sensing also remained on schedule.

The company’s largest customer accounted for 90% of total revenues in the fiscal first quarter.

Cirrus Logic's HPMS Sales Gain Momentum

High-Performance Mixed-Signal revenues climbed to $210.7 million from $167.2 million a year earlier and represented 46% of net sales.

Audio revenues increased 3.7% to $249 million and represented 54% of quarterly sales.

Management described the opportunity pipeline across camera, battery and power applications as one of the strongest in the company's history. A power product is already shipping in tablets, while another product for an accessory has yet to reach the market. Additional phone and non-phone programs remain in active development.

Margins Absorb Pricing Pressure

Non-GAAP gross profit was $242.1 million, with gross margin edging up to 52.7% from 52.6% a year ago. Favorable product mix supported the year-over-year comparison, while higher freight and supply-chain costs limited the improvement. Sequentially, pricing reductions outweighed cost savings.

Non-GAAP operating expenses rose 13.3% year over year to $135.4 million. Higher employee-related costs were the main driver, with variable compensation, product development and professional expenses also contributing.

Non-GAAP operating income reached $106.7 million, while operating margin slipped to 23.2% from 23.3%.

Cirrus Logic's PC Outlook Faces Delays

Cirrus lowered its fiscal 2027 PC revenue expectations. Constrained supply of a key industry platform, memory and component shortages and delayed model introductions pushed out expected growth. Management characterized these pressures as timing issues rather than a change in the underlying opportunity.

Customer interest remained strong for the company's low-power smart codec for AI-enabled PCs, with multiple designs targeted for next calendar year. Several customers also announced PCs based on NVIDIA's RTX Spark platform that are expected to ship later this year with Cirrus amplifiers and codecs.

Cirrus Extends Its Mixed-Signal Reach

The company taped out a new high-performance analog front-end family for smart meters and expects to begin sampling during the September quarter. The products combine higher-accuracy voltage and current measurement with on-chip processing for power-quality analysis and fault detection.

Cirrus is targeting a calendar 2028 market launch and sees potential applications in data center DC metrology, energy storage, EV charging and grid monitoring. A new GlobalFoundries agreement secures dedicated wafer capacity and pricing for 2027 and 2028 while supporting progress toward U.S. production.

Cirrus Logic's Cash Position Funds Priorities

Cash and investments totaled $1.2 billion at quarter-end, with no debt outstanding.

Operating cash flow was $64.1 million, and free cash flow totaled $48.6 million, translating into an 11% margin.

It spent $34.5 million to repurchase about 211,000 shares, leaving $239.6 million under its authorization. After quarter-end, it bought roughly 359,000 additional shares for $50.5 million. Management continues to prioritize organic investment, followed by acquisitions and buybacks, and is not considering a near-term dividend.

Guides for a Sequential Revenue Increase

For the second quarter of fiscal 2027, Cirrus expects revenues of $510-$570 million. The $540 million midpoint implies growth of 17% sequentially and a decline of 4% year over year.

GAAP gross margin is projected at 52-54%, including a temporary benefit from favorably priced wafers that should largely sell through during the quarter.

Non-GAAP operating expenses are expected at $140-$146 million.

Full-year expenses are expected to increase as Cirrus expands R&D investment, while the non-GAAP tax rate is forecast at 16-18%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -8.87% due to these changes.

VGM Scores

At this time, Cirrus Logic has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of B on the value side, putting it in the second quintile 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. It's no surprise Cirrus Logic has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Cirrus Logic belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, Qualcomm (QCOM Quick QuoteQCOM - Free Report) , has gained 5.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Qualcomm reported revenues of $9.95 billion in the last reported quarter, representing a year-over-year change of -4%. EPS of $2.21 for the same period compares with $2.77 a year ago.

Qualcomm is expected to post earnings of $2.18 per share for the current quarter, representing a year-over-year change of -27.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.4%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Qualcomm. Also, the stock has a VGM Score of F.