Cirrus Logic Inc. develops analog and mixed-signal integrated circuits used in audio and energy-related applications. The company was founded in 1984 and is based in Austin, Texas.
CRUS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Cirrus Logic Inc. To summarize, we found that Cirrus Logic Inc ranked in the 40th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. In terms of the factors that were most noteworthy in this DCF analysis for CRUS, they are:
Interest coverage, a measure of earnings relative to interest payments, is 172.49; that's higher than 95.76% of US stocks in the Technology sector that have positive free cash flow.
The business' balance sheet reveals debt to be 3% of the company's capital (with equity being the remaining amount). Approximately only 10.01% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
CRUS's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 52.98% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Cirrus Logic Inc? See APH, STM, VMW, CLGX, and INTC.
Cirrus Logic (NASDAQ: CRUS) crushed Wall Street's expectations with a terrific fiscal 2020 fourth-quarter report earlier this month. The chipmaker's revenue and earnings increased substantially during the quarter that ended in March, which is impressive considering the impact of the COVID-19 pandemic on smartphone markets across the globe. Apple (NASDAQ: AAPL) is its largest customer, accounting for 75% of the total revenue last quarter, followed by an Android smartphone maker that supplies another 10%.