CRUS

We rate CIRRUS LOGIC, INC. (CRUS) as a Hold with a composite score of 64.5/100 at a current price of $144.96. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in value (82th percentile) and quality (79th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (30th percentile) and momentum (61th percentile) tempers our overall conviction. We assign a Narrow Moat rating (61/100), Medium uncertainty, and Exemplary capital allocation.

Key items to watch: sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

CIRRUS LOGIC, INC. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 64.5/100 places it at rank #311 in our full 7,333-stock universe. At $6.5B in market capitalization, CIRRUS LOGIC, INC. is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 55% and momentum in the 61th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 30th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 53% (+10.1pp vs sector) narrow to operating margins of 24% (+22.3pp vs sector) and net margins of 20.3%, yielding a gross-to-net conversion rate of 39%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $144.96, CIRRUS LOGIC, INC. appears undervalued relative to its fundamentals. Our value factor score of 82/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 16.7x (a 25% discount to the sector median of 22.3x), EV/EBITDA of 14.4x (at a premium), P/B of 3.5x, P/S of 3.5x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Medium uncertainty rating to CIRRUS LOGIC, INC.. The stock presents a balanced risk profile: elevated market sensitivity (beta of 1.32). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.32). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 67th percentile and quality factor at the 79th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 53% provide a buffer against cost pressures; conservative leverage (17% D/E) limits balance sheet risk; above-average stability (67th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate CIRRUS LOGIC, INC.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 20.7%, disciplined leverage (17% D/E), best-in-class net margins of 20.3%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — CIRRUS LOGIC, INC. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 17.7% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, CIRRUS LOGIC, INC. receives a Hold rating with a composite score of 64.5/100 (rank #311 of 7,333). Our quantitative framework assigns a Narrow Moat (61/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 64/100.

Our analysis supports a neutral stance on CIRRUS LOGIC, INC.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.