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 (
-- Cirrus Logic
) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- CRUS's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for CIRRUS LOGIC INC is rather high; currently it is at 57.00%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CRUS's net profit margin of 7.00% significantly trails the industry average.
- Compared to its closing price of one year ago, CRUS's share price has jumped by 113.83%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- CIRRUS LOGIC INC's earnings per share declined by 23.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CIRRUS LOGIC INC reported lower earnings of $1.30 versus $2.81 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $1.30).
Cirrus Logic, Inc., a fabless semiconductor company, develops high-precision, analog and mixed-signal integrated circuits (ICs) for a range of consumer and industrial markets. Cirrus Logic has a market cap of $2.56 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 31.5, above the S&P 500 P/E ratio of 17.7. Shares are up 147.4% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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