Should You Think About Buying Cirrus Logic, Inc. (NASDAQ:CRUS) Now?

While Cirrus Logic, Inc. (NASDAQ:CRUS) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Cirrus Logic’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Cirrus Logic

What's The Opportunity In Cirrus Logic?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 10.44% above our intrinsic value, which means if you buy Cirrus Logic today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $70.73, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Cirrus Logic’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Cirrus Logic look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Cirrus Logic's earnings over the next few years are expected to increase by 86%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in CRUS’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on CRUS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Cirrus Logic as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for Cirrus Logic and you'll want to know about them.

If you are no longer interested in Cirrus Logic, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.