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Cowen maintained an Outperform rating and $100 per share price target on Cirrus Logic (NASDAQ:CRUS) in a note, telling investors it sees ongoing product/socket growth at the company’s top customer driving multi-year visibility.
Analysts made the comments after the firm hosted Cirrus Logic CFO Venk Nathamuni and VP of HPMS Carl Alberty for investor meetings.
“Acknowledging mobile/consumer unit weakness, we see ongoing product/socket growth at Cirrus’ top customer driving multi-year visibility. We came away impressed with Cirrus’ diversifying opportunities in both the audio and mixed-signal domains, supported by expanded supply and entrenched Apple (NASDAQ:AAPL) relationship,” the analysts wrote.
They went on to add that they came away from the meetings incrementally more confident in Cirrus’ growth trajectory despite smartphone unit choppiness.
“Management reiterated its commitment to a three-pronged growth strategy of: 1) maintaining leadership in smartphone audio; 2) broadening non-mobile audio in key areas (i.e., notebooks, etc); and 3) expanding non-audio HPMS applications (the largest; we believe still focused on Cirrus’ largest customer). We acknowledge many investors remain understandably concerned about Smartphone unit cuts and customer concentration, but we point to Cirrus’ ongoing content gains at Apple, and the relatively resilient premium tier demand (including in the Android market, where Cirrus’ exposure remains only in the flagship tier) that should act as ballast against broader Smartphone weakness,” they added.
They concluded that while the “whole world appears to be bracing for an iPhone unit cut,” when that potentially happens, they see Cirrus as one of the “cleanest stories in mobile semis, with line of sight to content gains in each of the next two (potentially three) iPhone generations.”
