Seeking Alpha

Cirrus Logic falls; Feltl worried about Apple price pressure

ASP pressure from Apple will lead Cirrus Logic's (CRUS -4.4%) revenue and EPS to keep declining in FY15 (ends March '15), predicts Feltl's Jeffrey Schreiner, downgrading shares to Hold.

He thinks 7% FY16 revenue growth is possible on the back of new product sales (including products sold to Apple), but expects EPS to remain pressured by the exhaustion of deferred tax assets.

Schreiner sees a lack of new iPhone chip content, along with diminished iPad content (previous), leading to a ~15% FY15 ASP drop with Apple. Cirrus is already expected by the sell-side to see a 4.8% FY15 revenue drop, following a 12.6% drop in FY14.

After backing out cash/investments, shares go for just 5x FY13 EPS, and 8x FY15E EPS. FQ4 results are due on April 24.

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