Cirrus Logic Adjusted, Stays a Buy
Cirrus Logic Inc. (
CRUS) is a fabless OEM (original equipment manufacturer) of analog, mixed-signal and digital processing integrated circuits (ICs). The company's Q3 2009 results were in line with the preannouncement, but lower than the previously issued guidance.
Expecting further weakness in the top-line growth we are adjusting our numbers downward to reflect this and have reduced our estimates for 2009 and 2010. The seismic product line remains a strong growth area and the revenue opportunity is larger in the near term. This group should maintain its growth even though oil prices have recently declined.
We remain positive on the stock and our recommendation remains a BUY. Based on a P/E ratio of 12.2x, our estimate of the growth in EPS of 19.0% and our $0.41 estimate of 2011 earnings, our price target is $5.00.
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