CRUS: Apple iPhone Momentum Will Likely Fade And Pressure Rich Semiconductor Multiple

Analysts have modestly raised their price target on Cirrus Logic to approximately $99 from about $91, citing stronger than expected recent and upcoming results supported by robust Apple iPhone unit shipments and an outlook for generally better than seasonal performance across the semiconductor group.

Analyst Commentary

Recent Street commentary on Cirrus Logic reflects a generally constructive fundamental backdrop, but with an undercurrent of caution around the durability of growth and the sustainability of current valuation multiples. While price targets have moved higher alongside better iPhone trends and outperformance versus earlier expectations, some market participants remain focused on execution risks and macro headwinds that could cap upside.

In particular, there is growing attention on the potential for mixed demand patterns across end markets in coming quarters, even as near-term smartphone volumes track ahead of prior forecasts. This has prompted a more nuanced debate around how much of the recent strength is cyclical and how much is structural, and whether current earnings power can be maintained if broader semiconductor spending normalizes.

Bearish Takeaways

• Bearish analysts caution that a meaningful portion of the recent share price move already discounts strong iPhone driven upside, leaving less room for multiple expansion if growth reverts toward more normal seasonal patterns.
• Some see execution risk in sustaining above-trend revenue growth, arguing that heavy dependence on premium smartphone volumes could expose Cirrus Logic to volatility if upgrade cycles slow or mix shifts toward lower content devices.
• There are concerns that broader semiconductor demand may moderate, with weaker trends in auto and other cyclical verticals potentially pressuring group valuations and tightening the margin for error on earnings delivery.
• Bearish analysts also flag the risk that investor expectations for continued quarterly beats have risen, raising the bar for future guidance and amplifying downside risk if management commentary turns more cautious.

What's in the News

• Launched new CS40L51, CS40L52 and CS40L53 closed-loop haptic drivers, the company’s first AEC-Q100 qualified automotive haptics solutions, expanding its presence in in-cabin tactile interfaces and premium smart surfaces (Key Developments).
• Highlighted advanced closed-loop algorithms such as Sensor-less Velocity Control, audio-to-haptics synchronization and active vibration compensation to deliver higher fidelity, more consistent haptics effects across a wider frequency range and varying conditions (Key Developments).
• Engineering samples of the CS40L51, CS40L52 and CS40L53 are available now, with mass production targeted to begin in December 2025, supporting future generations of haptics-enabled automotive designs (Key Developments).
• Completed a share repurchase tranche totaling 801,816 shares, or 1.55 percent of shares, for approximately $85.9 million under the buyback program announced on May 6, 2025 (Key Developments).
• Issued third quarter fiscal 2026 revenue guidance in the range of $500 million to $560 million (Key Developments).

Valuation Changes

• Fair Value Estimate has risen modestly from approximately $90.84 to about $98.77, reflecting a more optimistic view of intrinsic equity value.
• The Discount Rate increased slightly from roughly 10.06 percent to about 10.48 percent, indicating a marginally higher required return and risk assessment.
• Revenue Growth was revised upward from an expected modest decline of around 0.55 percent to a smaller decline of about 0.22 percent, implying a less negative top line trajectory than previously modeled.
• The Net Profit Margin improved slightly from approximately 15.68 percent to about 16.43 percent, supporting a somewhat stronger long term earnings profile.
• Future P/E edged up marginally from roughly 18.72x to about 18.84x, signaling a small increase in the valuation multiple applied to forward earnings.