Cirrus guides revenues up

Directly after the earnings report of Cirrus Logic this morning the stock didn’t react much. It was down with the whole market and with Apple. The correlation of Cirrus’ and Apple’s stock is remarkable. Cirrus’ rally today was more attributable to the move of AAPL ahead of Apple’s earnings release after the market closed than anything else.

Cirrus Logic beat by a penny and guided revenues for the next quarter up. The weekly chart demonstrates that this company is on the move these days.

The pink earnings line shows something else, namely a relatively small PE ratio (15 for the latest quarterly results extrapolated to a full year). The market still fears the cyclical semiconductor nature of this stock and is not willing to let its price shoot up more. Should the smart phone and tablet computer craze continue and Cirrus be profiting from it, Mr. Market may finally change its stance on this.

The chart above of the last 9 years shows clearly that CRUS used to be a cyclical stock. However, the rise of the blue revenues line and the driving growth prospects behind it are encouraging. Eventually this is a semiconductor stock and it will regain its cyclical character, but there is potential for an intermediate growth ride.