Story updated at 10 a.m. to reflect market activity.
Shares of Cirrus Logic were falling 0.2% to $22.90 in morning trading.
"Our short thesis was based on the belief that incremental ASP/margin pressure from top customer Apple (AAPL) combined with CRUS exhausting its NOLs to become a tax-payer beginning early in 2015 would lean on EPS...and the stock," analysts Rick Schafer, Shawn Simmons, and Joseph Zaccaria wrote, adding that those negative events "have now largely played out."
The analysts expect potential for some upside is Smart Codec content gains at Apple, or if Android designs "materialize."
Must Read: Warren Buffett's 25 Favorite Stocks
"Our cautious outlook centered on a dearth of new features/functionality creating ASP/margin pressure at top customer Apple (70%+ of sales). Despite its retaining the IP6 amp socket, we estimate dollar content dropped 25%-plus to ~$2.15 from 5s/5c (after dropping 30%-plus in IP5). CRUS' new 55nm "Smart Codec" (integrated codec+DSP) could help reverse this trend," the analysts wrote.
Separately, TheStreet Ratings team rates CIRRUS LOGIC INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CIRRUS LOGIC INC (CRUS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."