Cirrus Logic: We Continue To See Valuation Extended At These Levels, Says Oppenheimer


In a research report issued today, Oppenheimer analyst Rick Schafer assigned an Underperform rating on Cirrus Logic (NASDAQ:CRUS). No price target was provided.

Schafer wrote, “CRUS reported F2Q (Sep.) sales/EPS of $210M/$0.68, besting consensus’ $188M/ $0.54E as the company benefited from strong AAPL sales and five weeks (~$13M) of WLF revenues. Mgmt guided F3Q (Dec.) revenues to $275M (vs. consensus est. $217M) on AAPL strength and a full quarter of WLF sales (~$25M). GM of 48.7% in September tracked modestly ahead of expectations; however, GMs are declining ~370bp to 45% in December as lower margin WLF folds into the mix and GMs at AAPL continue to compress. Additionally, CRUS will exhaust its US NOLs by March and is expected to become a 30% tax payer (vs 3% today) in CY15. Despite the strong top-line results and guidance, we continue to see valuation extended at these levels.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rick Schafer has a total average return of 9.9% and a 72.5% success rate. Schafer has a 5.4% average return when recommending CRUS, and is ranked #503 out of 3354 analysts.

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