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Cirrus Logic Drops; Wall Street Analysts Still See Upside

Cirrus Logic reported weaker-than-expected quarterly earnings and revenue and gave downside guidance. Wall Street analysts are undaunted.
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Shares of fabless semiconductor maker Cirrus Logic (CRUS) - Get Cirrus Logic, Inc. Report dropped Friday after analysts digested -- and some of them shrugged off -- the Apple  (AAPL) - Get Apple Inc. (AAPL) Report supplier's earnings miss and downside guidance.

For the fiscal fourth quarter ended March 27 the Austin company reported adjusted earnings of 66 cents a share, compared with the FactSet analyst survey's consensus estimate of 71 cents. 

Revenue came in at $294 million compared with the analyst estimate of $302 million. 

For the first quarter the company expects revenue between $240 million and $280 million, bracketing analyst expectations of $263 million. 

Here's what analysts are saying about the company's latest quarter:

Analysts at Cowen affirmed an outperform rating and $115 price target on Cirrus.

The "surprising miss is painful" especially in light of Apple's strong quarter, Cowen said. But while the shares will "likely see understandable short-term weakness," Cirrus's long-term growth drivers remain intact, the investment firm said, according to Bloomberg. 

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Susquehanna also remained positive on the company with a $115 price target: "We urge investors not to overreact to underwhelming June guidance as tracking the Apple contribution can be extremely misleading on a quarter-by-quarter basis." 

The investment firm also expects shipments to return to normal later this year and says Cirrus still has long-term growth prospects.

KeyBanc Capital maintained its overweight rating while lowering its price target to $100 from $110.

The results and outlook were disappointing, but "despite the whiff, we believe the opportunity for a major upgrade cycle in the next-gen iPhone remains intact," KeyBanc said.

Oppenheimer has a market-perform rating. The "softer [fiscal-first-quarter] outlook fits with seasonal norms and was well telegraphed by Apple," analysts said, according to Bloomberg. 

The investment firm sees limited upside for the company and there's a risk due to how concentrated its revenue is to Apple. 

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