September 26, 2024
Top 10 Stock Cirrus Logic Buy Recommendation

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For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View Cirrus Logic Buy

360 METRICS	September 26, 2024
VALUE
VALUE	33
GROWTH
GROWTH	29
SAFETY
SAFETY	98
SENTIMENT
SENTIMENT	69
360° VIEW
360° VIEW	73

ANALYSIS: With an Obermatt 360° View of 73 (better than 73% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cirrus Logic are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Cirrus Logic. The consolidated Sentiment Rank has a good rank of 69, which means that professional investors are more optimistic about the stock than for 69% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 98 or better than 98% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 33, meaning that the share price of Cirrus Logic is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 29. ...read more

RECOMMENDATION: With a consolidated 360° View of 73, Cirrus Logic is better positioned than 73% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 69) and safe financing practices (Safety Rank of 98), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Cirrus Logic̣ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for Cirrus Logic positive

SENTIMENT METRICS	September 26, 2024
ANALYST OPINION
ANALYST OPINION	39
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	86
MARKET PULSE
MARKET PULSE	68
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	69

ANALYSIS: With an Obermatt Sentiment Rank of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock Cirrus Logic is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Cirrus Logic. Analyst Opinions are at a rank of 39 (worse than 61% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Cirrus Logic. Even better, the Professional Investors rank is 86, meaning that professional investors hold more stock in this company than in 86% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 68, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 68% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 69 (more positive than 69% compared with investment alternatives), Cirrus Logic has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more

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Value Strategy: Cirrus Logic Stock Price Value below-average critical

VALUE METRICS	September 26, 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	44
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	67
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	42
DIVIDEND YIELD
DIVIDEND YIELD	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	33

ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Cirrus Logic shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Cirrus Logic. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 67, which means that the stock price compared with what market professionals expect for future profits is lower than for 67% of comparable companies, indicating a good value concerning Cirrus Logic's profit levels. But Price-to-Sales is 44 which means that the stock price compared with what market professionals expect for future profits is higher than for 56% of comparable companies, indicating a low value concerning Cirrus Logic's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 42 and for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on Cirrus Logic's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Cirrus Logic is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more

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Growth Strategy: Cirrus Logic Growth Momentum low

GROWTH METRICS	September 26, 2024
REVENUE GROWTH
REVENUE GROWTH	6
PROFIT GROWTH
PROFIT GROWTH	57
CAPITAL GROWTH
CAPITAL GROWTH	27
STOCK RETURNS
STOCK RETURNS	89
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	29

ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Cirrus Logic shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cirrus Logic. Profit Growth has a rank of 57, which means that currently professionals expect the company to grow its profits more than 57% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 89 (above 89% of alternative investments). But Sales Growth has a below the median rank of 6, which means that, currently, professionals expect the company to grow less than 94% of its competitors, and Capital Growth also has a lower rank of 27. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Cirrus Logic. ...read more

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Safety Strategy: Cirrus Logic Debt Financing Safety very solid

SAFETY METRICS	September 26, 2024
LEVERAGE
LEVERAGE	100
REFINANCING
REFINANCING	51
LIQUIDITY
LIQUIDITY	100
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	98

ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2024, the company Cirrus Logic has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Cirrus Logic is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Cirrus Logic. Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Refinancing is at a rank of 51, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. Finally, Liquidity is also good at a rank of 100, which means that the company generates more profit to service its debt than 100% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 98 (better than 98% compared with alternatives), Cirrus Logic has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more

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Combined financial peformance: Cirrus Logic Above-Average Financial Performance

COMBINED PERFORMANCE	September 26, 2024
VALUE
VALUE	33
GROWTH
GROWTH	29
SAFETY
SAFETY	100
COMBINED
COMBINED	62

ANALYSIS: With an Obermatt Combined Rank of 62 (better than 62% compared with investment alternatives), Cirrus Logic (Semiconductors, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Cirrus Logic are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives) and show below-average growth (Growth Rank of 29) but are safely financed (Safety Rank of 98), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 62, is a buy recommendation based on Cirrus Logic's financial characteristics. As the company Cirrus Logic's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 33) and low growth (Obermatt Growth Rank of 29), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 98) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

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