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Cirrus Logic Inc. Stock Buy Recommendation Reiterated (CRUS)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Cirrus Logic (Nasdaq:CRUS) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, increase in net income and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

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Highlights from the ratings report include:

  • CRUS's very impressive revenue growth greatly exceeded the industry average of 11.4%. Since the same quarter one year prior, revenues leaped by 153.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CRUS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, CRUS has a quick ratio of 2.48, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 305.6% when compared to the same quarter one year prior, rising from $16.73 million to $67.86 million.
  • Net operating cash flow has significantly increased by 433.33% to $79.19 million when compared to the same quarter last year. In addition, CIRRUS LOGIC INC has also vastly surpassed the industry average cash flow growth rate of -39.24%.

Cirrus Logic, Inc., a fabless semiconductor company, develops signal processing integrated circuits (ICs) for audio and energy markets. Cirrus Logic has a market cap of $1.54 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 10.2, below the S&P 500 P/E ratio of 17.7. Shares are down 17.6% year to date as of the close of trading on Wednesday.

You can view the full Cirrus Logic Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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