Cirrus Logic, Inc. (CRUS): what the price assumes

In the published model solve dated 2026-Q2, anchored at $108.02, Cirrus Logic, Inc. (CRUS) is priced for -0.9% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-31 · Source: https://boothcheck.com/report/CRUS

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 10.3% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.0%); the inversion above states its own rate.

Per-Model Detail (n=18)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• One end customer, named in the filing as "Apple Inc., who purchased through multiple contract manufacturers", accounted for roughly 91 percent of fiscal 2026 net sales, up from 89 and 87 percent in the two prior years.
• That concentration comes attached to unusual economics: a 24.5% trailing operating margin against single-digit and low-double-digit margins at most of the analog peer group.
• First-quarter fiscal 2027 results are due August 5, 2026, and the line to watch is the HPMS product family, whose fiscal 2025 base of $758.9 million grew about 10 percent last year.

Bull Case

Start with the disagreement, because it is unusually one-sided. Run Cirrus Logic through the standard frames and most of them land above the current share price. The peer-multiple methods put the price at roughly 0.7 times where they sit. The forward-growth methods put it at roughly 0.8 times. The earnings-power methods land essentially level with it, and only the asset-value frames, which judge a fabless designer on its book equity and therefore miss most of what it owns, land meaningfully below. When the value-oriented lenses say cheap and the growth lens is the least demanding of the group, that is a value read, not a momentum one.

The inverted version of the same point is sharper. Today's price works out to about 11.4 times company-wide operating income, and holding it requires operating profit to compound at roughly 4.5% a year over the next five years. That is a modest ask for a business that has been growing considerably faster than that recently. The price is not asking Cirrus Logic to be exceptional. It is asking it not to shrink.

The economics behind that are genuinely good. The FY2026 10-K reports that "gross margin for fiscal year 2026 was 52.8 percent", attributing the increase to "a more favorable product mix". Trailing operating margin runs 24.5%. Set that against the analog and mixed-signal cohort and the gap is not subtle: SWKS earns a 9.1% operating margin on $4.04 billion of revenue, QRVO 11.2%, MCHP 10.4%, and ON 10.0% on $6.06 billion. MTSI, the closest on profitability, earns 16.0%. Cirrus Logic is a fifth their size and roughly twice as profitable per dollar of sales.

The second product family is where the growth argument lives. Management states that "our HPMS product line presents the largest opportunity to drive application diversification and fuel exciting avenues of growth in the coming years", and the same filing records HPMS revenue rising about 10 percent from a fiscal 2025 base of $758.9 million, "largely attributable to demand for components shipping into smartphones". The company also reports gaining share "across all PC segments", with new amplifiers and codecs aimed at AI-enabled notebooks. Those are two different diversification paths: more silicon content per phone, and a second device category entirely.

Capital allocation reads like a company that agrees with the value case. The FY2026 10-K describes "$500 million in share repurchases authorized by the Board of Directors in March 2025", to be "funded from existing cash", and records 0.5 million shares bought back for $70.0 million in the fiscal fourth quarter alone. The share count has fallen about 2.8% a year over the four years to December 2025. Fiscal 2026 cash flow from operations was $650.6 million, and the filing states the company "had no amounts outstanding under the Revolving Credit Facility and was in compliance with all covenants". Buybacks funded from operations, not from borrowings, are the version of capital return that survives a bad year.

The bull has to concede the obvious: this is a single-customer business, and no amount of margin makes that not true. The counter is narrow but real. The concentration is the price of being the incumbent inside the highest-volume consumer hardware platform in the world, and the content-per-device trend has been running in Cirrus Logic's favour, not against it.

Bear Case

The competitor list in the 10-K is long and it is not a list of small companies. Cirrus Logic names "QUALCOMM Incorporated, Realtek Semiconductor Corporation, Renesas Electronics Corporation, Shanghai Awinic Technology Co., Ltd., Shenzhen Goodix Technology Co, Ltd., Skyworks Solutions Inc., ST Microelectronics N.V., Synaptics Incorporated and Texas Instruments, Inc." among those it competes with. Several of those are order-of-magnitude larger and can price an audio codec as a rounding error inside a broader platform sale. The filing is blunt about the consequence: "As markets mature and components become commoditized, competitors that can tolerate" lower returns gain ground, and "our competitors have increasingly frequent opportunities to achieve design wins in next-generation systems" because design-in cycles keep shortening.

But the competitor that matters most is on the other side of the table. The same filing warns that if customers "were to change system architectures, develop competing technologies and integrated circuits, incorporate some of the functionality of our products into other parts of the system, or eliminate certain functionality", the business is directly exposed. Now put a number on who that customer is. The 10-K discloses one end customer, Apple Inc., buying through contract manufacturers and representing "approximately 91 percent, 89 percent, and 87 percent, of the Company's total net sales" in fiscal 2026, 2025 and 2024. The concentration is not stable at a high level. It is rising. And this particular customer has spent a decade demonstrating that it moves component functions in-house when it decides the function is strategic.

The company says so itself, in the plainest terms a risk factor allows: "most of our customers can stop incorporating our products into their own products with limited notice to us and suffer little or no penalty", and their agreements "typically do not require them to purchase a" minimum. Ninety-one percent of revenue rests on relationships with that structure.

Now connect that to what the price assumes. The market is paying roughly 11.4 times company-wide operating income and needs about 4.5% annual operating-profit growth for five years to hold. That looks undemanding, and it is, right up until the growth is not 4.5% but negative. A single lost socket at this customer does not shave a few points off the compound rate; it removes a slice of revenue in one product cycle. The price already embeds some of that erosion: it assumes operating margins settling near 14.8% over roughly a dozen years, against 24.5% today. The bear case is that the erosion arrives faster and from one decision rather than gradually from competitive drift.

The supply side offers no cushion either. The company holds "a long-term capacity reservation and wafer supply agreement with GlobalFoundries, which includes obligations to" take specified wafer volumes through the end of the current commitment period. Fixed purchase obligations against a demand stream that can stop with limited notice is the wrong shape of contract to hold in a downturn.

The frames that say the shares are cheap are all built on the trailing margin holding. The asset-value methods strip that assumption out and rest on book equity alone, and against those asset-value frames the price sits at roughly 1.6 times their central estimate. That is the honest floor: without the customer, this is a mid-size fabless designer with good engineers, and the peer group trades where it trades because most of its members earn single-digit operating margins.

Valuation

Today's price of $133.58 works out to about 11.4 times company-wide operating income, and inverting it gives a modest requirement: roughly 4.5% compound growth in operating profit over five years, on a 10.4% cost of capital. The sensitivity runs mostly through that discount rate rather than through the business, with each percentage point on the cost of capital moving the required growth by about 4.7 points. Against the wider semiconductor cohort the multiple sits in the lower half of the peer range.

The methods used to triangulate the business mostly disagree with the price in the company's favour. The peer-multiple methods put the price at roughly 0.7 times where they land, the forward-growth methods at roughly 0.8 times, and the earnings-power methods essentially level with it. Only the asset-value frames sit clearly under, with the price at roughly 1.6 times their central estimate, and that is what asset-value frames always do to a fabless designer whose main assets are intellectual property and engineers rather than book equity. The single most useful individual read is the growth-adjusted earnings method, which compares trailing earnings of $7.85 a share against the company's historical earnings growth and marks the shares undervalued on that basis. The cash-flow perpetuity method lands furthest above the price by projecting free cash flow forward at a historical growth rate; it is the most optimistic of the set and should be treated as the ceiling of the range rather than the middle of it.

There is a quieter assumption inside the price that deserves to be said out loud. The engine's read implies operating margins drifting down toward about 14.8% over roughly a dozen years, against a trailing 24.5% today. In other words, the market is not paying for the current margin to persist. It is paying for a slow decline toward something closer to the peer group, and the shares are priced accordingly.

The filed inputs underneath are strong and specific. The FY2026 10-K reports "gross margin for fiscal year 2026 was 52.8 percent" and fiscal 2026 cash flow from operations of $650.6 million. The same document discloses that one end customer, Apple Inc., represented "approximately 91 percent, 89 percent, and 87 percent, of the Company's total net sales" across the last three fiscal years, and that the board authorized "$500 million in share repurchases" in March 2025, funded from existing cash.

Cohort position explains most of the multiple. Cirrus Logic's 24.5% trailing operating margin is roughly double SWKS at 9.1%, MCHP at 10.4% and ON at 10.0%, and better than MTSI at 16.0%. A business earning twice the cohort margin trading in the lower half of the cohort multiple range is a straightforward statement about how the market weighs customer concentration against profitability. The balance sheet does not complicate the picture: the filing records "no amounts outstanding under the Revolving Credit Facility", and the share count has fallen about 2.8% a year since 2021, so the buyback is showing up where it cannot be faked.

Catalysts

First-quarter fiscal 2027 results are scheduled for August 5, 2026, and the company issued its notice of the report on July 14, 2026. The comparison base is a strong one: Cirrus Logic closed fiscal 2026 on May 6, 2026 with fourth-quarter revenue of $448.5 million and record full-year revenue of $2.0 billion.

The most consequential development is upstream of the income statement. On March 26, 2026, Apple named Cirrus Logic among the suppliers added to its US manufacturing program. For a company that books roughly 91 percent of sales through that one end customer and reports international sales at "99" percent of net sales, a formal place in the customer's domestic manufacturing plans is the closest thing available to a signal about the durability of the relationship, and it speaks to the concentration risk more directly than any product announcement would.

Two smaller items fill in the diversification story. On May 28, 2026 the company introduced nine new audio converters aimed at a wider range of platforms and price points, which is the kind of catalogue broadening that supports selling outside the anchor customer. On July 23, 2026 it announced a Scottish Enterprise grant to advance smart energy work, a small figure in isolation but consistent with the stated push to move beyond audio into adjacent mixed-signal applications.

Peer Cohorts (Per Segment, With Filing Citations)

Cirrus Logic (whole company) (reported)

• SWKS (SKYWORKS SOLUTIONS, INC.)
• FY2025 10-K: Notes. As of October 3, 2025, the Company was in compliance with all debt covenants under the Senior Notes. Term Credit Agreement On May 21, 2021, the Company entered into a term credit agreement (as amended, the "Term Credit Agreement") providing for a $ 1.0 billion term loan facility (the "Term Loan Facility"). On…
• FY2025 10-K: …party thereto and JPMorgan Chase Bank, N.A., as the administrative agent, amending the Revolving Credit Agreement, dated as of May 21, 2021, by and among the Company, the borrowing subsidiaries party thereto, the lenders party thereto and the administrative agent 8-K 001-05560 10.2 3/10/2023 10.24* Offer Letter,…
• QRVO (Qorvo, Inc.)
• FY2025 10-K: …practices and disclosure and investor expectations; • sales of our common stock, including sales by our directors and officers or significant investors; • repurchases of our common stock; 31 Table of Contents • recruitment or departure of key personnel; and • loss of key customers. We cannot assure that the price of…
• FY2025 10-K: …has been incurred and the amount of the loss can be reasonably estimated. The Company regularly evaluates developments in its legal matters that could affect the amount of the previously accrued liability and records adjustments as appropriate. Although it is not possible to predict with certainty the outcome of the…
• ALGM (ALLEGRO MICROSYSTEMS, INC.)
• FY2025 10-K: …for the intangible assets acquired is 12 years for completed technology and 15 years for customer relationships. The intangible assets are amortized using a method that approximates their economic benefit over their estimated useful lives. The goodwill recorded represents the anticipated incremental value of future…
• FY2025 10-K: …by and among the Company, Allegro MicroSystems, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company ("AML"), Silicon Structures LLC, a Delaware limited liability company and wholly owned subsidiary of AML ("Merger Sub"), Crocus, and NanoDimension Management Limited, as the…
• MTSI (MACOM Technology Solutions Holdings, Inc.)
• FY2025 10-K: …shares of common stock issuable upon vesting of restricted stock and restricted stock units, and a conversion premium for the 2026 Convertible Notes, as the inclusion would be anti-dilutive, but they could become dilutive in the future. 70 23. SUPPLEMENTAL CASH FLOW INFORMATION The following is supplemental cash flow…
• FY2025 10-K: 4. ACQUISITIONS ENGIN-IC, Inc.- On November 5, 2024, we completed the acquisition of ENGIN-IC, Inc. ("ENGIN-IC"), a fabless semiconductor company that designs advanced GaAs and GaN MMICs and integrated microwave assemblies located in Plano, Texas and San Diego, California (the "ENGIN-IC Acquisition"). We acquired…
• MCHP (MICROCHIP TECHNOLOGY INCORPORATED)
• FY2025 10-K: …the Company's manufacturing capabilities to help ensure the efficiency of the Company's operations and fulfillment of customer requirements. The technology licensing segment includes sales and licensing of the Company's intellectual property. The CODM uses segment gross profit for evaluating each segment's…
• FY2025 10-K: …held by the distributor. Such advances have no impact on revenue recognition or the Company's consolidated statements of income. The terms of these advances are set forth in binding legal agreements and are unsecured, bear no interest on unsettled balances and are due upon demand. The agreements governing these…
• ON (ON Semiconductor Corporation)
• FY2025 10-K: …technologies, including associated intellectual property licenses, from Aura Semiconductor to further enhance its power management portfolio within the AMG reportable segment. The total purchase consideration is up to $ 144.0 million in cash, subject to customary purchase price adjustments. Of this amount, $ 72.0…
• FY2025 10-K: …under this new standard and does not expect the adoption to have a material impact on the Company's results of operations or financial condition. Note 5: Acquisitions The Company pursues acquisitions and divestitures from time to time to leverage its existing capabilities and further expand its business to achieve…
• HIMX (Himax Technologies, Inc.)
• FY2025 20-F: …if any. Goodwill from acquisition of Himax Semiconductor, Inc. (formerly Wisepal Technologies, Inc., merged into Himax Technologies Limited on July 2, 2018) in 2007 amounting $ 26,846 thousand has been assigned to Driver IC cash generating unit ("CGU") and goodwill from acquisition of Himax Display (USA) Inc. in 2012…
• FY2025 20-F: ​ ​ - ​ - ​ - ​ - ​ - ​ ( 21 ) ​ ( 21 ) ​ 12 ​ ( 9 ) Dilution gain of equity method investment ​ - ​ ​ - ​ 213 ​ - ​ - ​ - ​ - ​ 213 ​ - ​ 213 Acquired the controlling power from noncontrolling interest ​ - ​ ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ 811 ​ 811 Liquidation of financial assets at fair value through other…
• DIOD (DIODES INC /DEL/)
• FY2025 10-K: …the price of our products, which could adversely affect our growth, and profit margins. " in Part I, Item 1A of this Annual Report for additional information. Management experience - The experience possessed by each member of the Company's executive team has created significant institutional insight into our markets,…
• FY2025 10-K: …the three months ended December 31, 2025. Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2025 to October 31, 2025 -…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.