NEW YORK (TheStreet) -- Cirrus Logic (CRUS) - Get Cirrus Logic, Inc. Report stock closed lower by 5.94% to $27.56 on heavy trading volume on Tuesday, as shares of Apple (AAPL) suppliers fell after reports suggested the technology company will cut back on iPhone production because of soft sales.
Production of the iPhone 6s and the 6s Plus could be reduced by about 30% during the first quarter of 2016 before returning to normal levels in the second quarter, according to Nikkei, a Japanese news service.
Weak sales of the latest iPhone models have caused inventories to rise in many key markets, including China, Europe, Japan and the U.S., Nikkei added.
Austin, TX-based Cirrus Logic manufactures high-precision analog and digital signal processing components.
Apple accounted for 72% of Cirrus Logic's total sales for the 2015 fiscal year, down from 82% for the 2013 fiscal year.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CIRRUS LOGIC INC as a Buy with a ratings score of B+. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, attractive valuation levels and compelling growth in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 45.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CRUS's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CRUS has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 5200.00% and other important driving factors, this stock has surged by 30.31% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CRUS should continue to move higher despite the fact that it has already enjoyed a very nice gain 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 3993.9% when compared to the same quarter one year prior, rising from $0.85 million to $34.88 million.
- You can view the full analysis from the report here: CRUS