CRUS
Cirrus Logic, Inc.
$107.87
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 22.1% above fair value
You pay
$107.87
Bear
$66.24
Fair
$88.32
Bull
$110.40
Bear
$66.24
-38.6%
$5.52 × 12x
Fair
$88.32
-18.1%
$5.52 × 16x
Bull
$110.40
+2.3%
$5.52 × 20x
Adjust Assumptions
16.0x
5.52$
Key Value Driver
Through-cycle normalized EPS ($5.52)
Implied Market Multiple
19.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$160.00
Divergence from AlphaVal
45%
Summary
Using 7-year normalized EPS of $5.52 at a 16x cycle multiple, the base-case value is $88.32 per share. P/TBV cross-check: 3.2x.
Warnings
Recent profits ($7.84/share) are 42% above the mid-cycle average ($5.52). Buying based on peak profits is the most common mistake with boom-and-bust businesses.
Price-to-book value of 3.2x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $160.00 (from 22 analysts). Our estimate is 45% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing