Cirrus Logic, Inc.

CRUS Details

Cirrus Logic, Inc. (NASDAQ: CRUS) provides low-power, high-precision mixed-signal processing solutions and the associated software for world’s top mobile and consumer applications. It is a leading provider of audio and high-performance mixed-signal processing solution provider.

Q1FY22 Results Performance (For the First Quarter Ended 26 June 2021)

Key Data (Source: Company Reports)

Entered Into an Agreement to Acquire Lion Semiconductor

Outlook

Guidance: The company plans to achieve revenue in the range of $430-$470 million in Q2FY22 with the GAAP gross margin estimated to stay between 50%-52%. Further, it has forecasted that its combined GAAP R&D and SG&A expenses to remain between $135-$141 million taking into consideration around $17 million in stock-based compensation expense and $3 million in amortization of acquired intangibles.

Accelerated Revenue Growth Expected in FY22: The company remains buoyant and continues to anticipate enhanced revenue growth in FY22 driven by its strong pipeline of audio and high-performance mixed-signal products ramping in the next few months. Besides, the company highlighted that the long-term Capacity Reservation and Wafer Supply Commitment with GlobalFoundries will expand its ability to cater to the unprecedented market demand and meet customers’ supply commitment.

Key Risks

The company relies on certain customers and distributors for a substantial portion of its sales. Any loss of customers or a substantial reduction in orders or pricing on products sold could significantly hurt its sales and profitability. Further, fluctuation in sales in the consumer electronics and smartphone markets could adversely affect its business.

Valuation Methodology: Price/Earnings Per Share Based Relative Valuation (Illustrative)

Technical Analysis

Daily Chart

Source: REFINITIV, Note: Purple color line reflects Relative Strength Index (14-Period)

Stock Recommendation

CRUS has delivered 3-month and 6-month returns of ~+11.21% and ~-8.15%, respectively. The stock is trading near the average of the 52-week high price of $103.25 and the 52-week low price of $55.84.

We have valued the stock using a Price/EPS multiple-based illustrative relative valuation and have arrived at a target price that reflects a rise of low double-digit (in % terms). A slight premium has been applied to Price/EPS Multiple (NTM) (Peer Average) considering its upbeat guidance on revenue growth in FY22 and its growth strategies.

Considering the aforementioned factors along with its expanding market reach, healthy liquidity position, and growth outlook, we give a “Buy” recommendation on the stock at the current market price of US$80.38, up by 0.83% on 11^th August 2021. 

Citrix Systems Inc. 

CTXS Details

Citrix Systems Inc. (NASDAQ: CTXS) is engaged in providing virtualization, networking, and cloud computing solutions to organizations across the globe. 

Q2FY21 Update (Ended 30 June 2021)

Total Revenue Up 2% YoY: The company’s total revenue for the second quarter of FY21 stood at $812 million, an increase of 2% YoY, due to the $71 million year-over-year decline in Product & License revenue as a result of discontinuing the Workspace perpetual license offering. Subscription revenue stood at $374 million, an increase of 54% YoY. SaaS revenue grew 60% YoY to $210 million and accounted for 56% of subscription revenue and 26% of total revenue in the second quarter.