Cirrus Logic, Inc. (NASDAQ:CRUS)

CAPS Rating: 5 out of 5

The Company develops precision analog and mixed-signal integrated circuits for a range of consumer and industrial markets.


Player Avatar RallyCry (< 20) Submitted: 5/4/2011 8:05:54 PM : Outperform Start Price: $18.43 CRUS Score: +4.01

Cirrus is expected to earn around $1.20 in 2012 and $1.55 in 2013. I like that they have no debt and are slated to grow about 20% a year over the next five years. They got punished for missing earnings in the Mar '11 quarter by 8.3%. However, the balance sheet is very strong and my estimates are conservative enough to allow for the occasional miss. My target over the next 12-18 months applies a modest multiple of 15 x 2013 consensus earnings of $1.55 -10% or $1.39 a share = $20.85. Add in $2.73 a share in cash and we arrive at a price target of $23.58 or 31.25% above market prices of $16.21.

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