Cirrus Logic (NasdaqGS:CRUS) Q2 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Cirrus Logic, Inc. (NasdaqGS:CRUS) is scheduled to report Q2 earnings results on November 2, 2020.

The company is expected to report earnings of $0.89/share on revenue of $310.2 million. The consensus earnings per share (EPS) of $0.89/share is based on a poll of 10 analysts and represents a decline in eps of −42.3% over the same quarter last year, when the company reported earnings of $1.55/share.

The revenue forecast of $310.2 million based on a poll of 10 analysts implies a year-over-year (YoY) decline in revenue of −20.2%. Last year the company reported $388.9 million in revenue for the quarter.

Expected to report EPS contraction of −42.3% for Q2, 2021
Metric Expected Prior Year YoY Change
Revenue $310.18 $388.91 −20.2%
EPS $0.89 $1.55 −42.3%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Cirrus Logic, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q1, 2021 $0.30 $0.53 75.6% Beat
Q4, 2020 $0.50 $0.68 37.2% Beat
Q3, 2020 $1.14 $1.41 24.2% Beat
Q2, 2020 $0.94 $1.55 64.1% Beat
Q1, 2020 $0.15 $0.35 139.7% Beat
Q4, 2019 $0.12 $0.37 197.3% Beat
Q3, 2019 $0.78 $0.91 16.5% Beat
Q2, 2019 $0.74 $1.08 46.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 3, 2020 $68.53 $68.43 −0.1% Decline
May 4, 2020 $70.83 $72.74 2.7% Increase
January 29, 2020 $83.32 $83.70 0.5% Increase
October 30, 2019 $58.03 $67.96 17.1% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.44, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.44 implies a 0.7% chance of earnings manipulation.

Fundamentals And Technical Analysis

Cirrus Logic, Inc. is currently trading at $67.56/share, down −0.1% for the day. The company is trading at approximately 73.7% of its 52-week high of $91.63/share. The company’s stock price is down −1.3% since the last earnings report and down −2.3% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 55.63 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:CRUS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 22.79 and a forward P/E multiple of 20.15.

Cirrus Logic, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.10. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2021.Q1
Period End Date June 27, 2020
Stock Price (Current) $67.56
P/E Ratio 22.8x
P/E Ratio (Fwd) 20.2x
PEG Ratio 0.3
Total Debt / Total Capital 3.5%
Levered Free Cash Flow $225.4 million
EV / EBITDA 12.9x

Finbox

Cirrus Logic, Inc. is a mid-cap stock with a market capitalization of $3.945 billion and a total enterprise value of $3.773 billion. The company operates in the Information Technology sector and the Semiconductors & Semiconductor Equipment industry.

Cirrus Logic, Inc., a fabless semiconductor company, develops, manufactures, and markets analog and mixed-signal integrated circuits (ICs) in the United States and internationally. It offers portable products, including codecs-chips that integrate analog-to-digital converters (ADCs) and digital-to-analog converters (DACs) into a single IC; smart codecs, a codec with digital signal processer; boosted amplifiers; micro-electromechanical systems microphones; haptic drivers; digital signal processors; and SoundClear technology, which consists of a portfolio of tools, software, and algorithms that offer enhanced voice quality, voice capture, and audio playback features. The company provides its portable products for use in smartphones, tablets, digital headsets; and wearables. It also offers non-portable and other products comprising codecs, ADCs, DACs, digital interfaces, and amplifiers for use in laptops, home theater systems, and musical instruments; satellite radio systems; and high-precision industrial and energy-related applications, including digital utility meters, power supplies, energy control, energy measurement, and energy exploration applications. The company markets and sells its products through direct sales force, external sales representatives, and distributors. Cirrus Logic, Inc. was founded in 1984 and is headquartered in Austin, Texas

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