Can Cirrus Logic Maintain Momentum With Its Strong Product Pipeline?

Cirrus Logic, Inc. CRUS is building on a strong product pipeline and continued progress across its core audio and high-performance mixed-signal (HPMS) businesses. The company delivered record first-quarter fiscal 2027 results, with revenue of $460 million, up 13% year over year, while non-GAAP earnings per share reached a record $1.84. Management highlighted continued strong demand for custom boosted amplifiers and smart codecs, supported by a strong product cycle from its customer. These products are expected to continue across multiple future product generations, providing long-term visibility and sustained revenue contribution.

Cirrus Logic also sees significant opportunities to expand HPMS content in smartphones and related products. The company is progressing on its camera product roadmap and continues to collaborate with customers on battery and power products. The smart power IC for 3D sensing remains on schedule, while additional power and battery programs could expand content over time. Management said the pipeline across its core audio and HPMS businesses is the strongest it has seen in recent years.

Outside smartphones, the PC market remains the company's largest near-term growth opportunity. However, fiscal 2027 expectations for the PC business have been reduced due to constrained supply of a key platform, memory and component shortages, pricing pressure and delayed OEM model introductions. Management characterized these issues as timing rather than fundamental, noting that customer engagement, design-win momentum and competitive standing remain encouraging. Interest in Cirrus Logic's low-power smart codec for AI-enabled PCs was strong, with multiple customer engagements advancing for designs planned for next year.

The company is also broadening into professional audio, automotive, industrial and imaging markets. A new family of high-performance analog front-end products targeting smart meters is expected to begin sampling in the September quarter, with potential applications in energy storage, data center DC metrology, EV charging and grid monitoring. Cirrus Logic also secured dedicated wafer capacity and pricing with GlobalFoundries for 2027 and 2028.

For the second quarter of fiscal 2027, Cirrus Logic expects revenue of $510 million to $570 million, GAAP gross margin of 52% to 54%, and non-GAAP operating expenses of $140 million to $146 million. Management expects fiscal 2027 operating expenses to rise as it invests in R&D to support the broad range of opportunities ahead.

Taking a Look at CRUS’ Competitors

Skyworks Solutions, Inc. SWKS is benefiting from sustained Broad Markets growth, led by Wi-Fi adoption, automotive connectivity and data center timing and power products. Rising RF complexity and a multi-generational Android win support the Mobile content outlook, while the Qorvo combination could add scale, diversification and cost savings. Near-term demand remains steady, and the fall smartphone ramp should lift Mobile revenue. For the fourth quarter of fiscal 2026, Skyworks expects revenues to be between $1.01 billion and $1.06 billion. Mobile revenues are expected to grow sequentially in the high teens, driven by seasonal product launches at the largest customer. Broad Markets is projected to increase approximately 5% year over year and represent about 39% of sales. Gross margin is forecast between 44% and 45%.

Qualcomm Incorporated’s QCOM diversification is gaining scale as automotive, industrial IoT and data center programs broaden revenue beyond handsets. Higher vehicle compute content, multi-generation auto wins and new data center engagements support a larger non-handset mix, while Modular expands the software stack for AI deployments. These gains are balanced by weaker handset economics, lower Apple modem share and industry-wide memory and input-cost increases. For the fourth quarter of fiscal 2026, Qualcomm forecasts revenues of $9.7-$10.5 billion. Qualcomm expects its modem share in the upcoming iPhone launch to be materially below the prior 20% estimate, while fourth-quarter automotive revenues are projected to rise approximately 60% year over year.

CRUS Price Performance, Valuation and Estimates

Shares of CRUS have lost 37.4% in the past three months compared with the Electronics-Semiconductors industry’s decline of 18.2%.

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CRUS is trading at a forward 12-month price/earnings ratio of 14.63, lower than the Electronic-Semiconductors sector’s multiple of 13.36.

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The Zacks Consensus Estimate for CRUS’ earnings for fiscal 2027 has been revised downward over the past 60 days.

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CRUS currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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