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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