# Cirrus Logic: 91% of sales come from Apple, and next quarter's guide is below last year's CRUS, Nasdaq. Published October 23, 2026. Price as of the October 22, 2026 regular session close. Fiscal year ends in March. Values in US dollars. ## Verdict: HOLD at $110.49 At the $110.49 close the shares trade 11.6% above my Base value of $98.97, so there is no discount at all. Confidence is C, the required margin of safety is 45%, and the maximum buy price is $54.43, so the price is 103.0% above it. Cirrus has $1.17 billion of cash and no debt, and the June quarter was strong, but about 91% of sales go to Apple, the September quarter is guided 3.7% below a year earlier at the midpoint and the share buyback slowed sharply. Hold, watchlist for new money. - Bear value: $54.90 - Base value: $98.97 - Bull value: $137.09 - Downside to base value: -10.4% - Maximum buy price: $54.43 - Required margin of safety: 45% - Owner cash yield, normalized: 6.4% - Share of sales from Apple: about 91% - Cash and investments: $1.17 billion - Business quality: 67/100 - Valuation score: 26/100 - Confidence: 14/25, grade C Cirrus Logic sold $459.7 million of chips in the June quarter, 12.9% more than a year earlier, and about 91% of its fiscal 2026 sales went to a single customer, Apple. For the September quarter the company guides revenue of $510 million to $570 million. The midpoint of $540 million is 3.7% below the same quarter a year ago (my arithmetic), so the quarter just reported may be a high point, in a business where one buyer sets the pace. At the $110.49 close the shares trade 11.6% above my triangulated Base value of **$98.97**. The Bear value is $54.90, 50.3% below the price, and the Bull value is $137.09, 24.1% above it. Weighting the three cases 25%, 55% and 20% gives $96.67. Confidence is grade C (14/25), the required margin of safety (MOS) is 45%, and the maximum buy price is **$54.43**, so the price is 103.0% above it. The Base value is the weighted result of two methods; the Bear and Bull come from the scenario model alone. Valuation route: a chip designer that does not own factories and sells mostly to one smartphone maker. Primary method: normalized owner cash (cash flow after stock compensation and all capital spending) times 10. Secondary method: enterprise value to operating profit (EBIT) of 10 times on fiscal 2027 estimates. Cash and investments of $1.17 billion are added once, and no value is added for the buyback. ## What Cirrus Logic is Cirrus Logic designs mixed-signal chips: audio converters and amplifiers, haptic drivers and power chips that go into premium smartphones and other devices. It has 1,668 employees and no factories. Most of its wafers come from TSMC in Taiwan, and it holds a capacity agreement with GlobalFoundries that runs through calendar 2026. Two segments report: Audio ($249.0 million in the June quarter) and high-performance mixed-signal (HPMS, $210.7 million, up 26% from a year earlier). The customer picture is the whole story. Apple was about 91% of fiscal 2026 sales, up from 89% in fiscal 2025 and 87% in fiscal 2024, and the top ten end customers together were about 96%. A business like that can earn very well when its customer adds content to each phone and loses a lot very quickly if that customer designs a part in-house or changes suppliers. My valuation lets the multiple, the margin of safety and the Bear case all carry that fact, once each. ## The latest results | First quarter of fiscal 2027 (to June 27, 2026) | Result | | --- | --- | | Revenue | $459.7 million, +12.9% year on year | | Audio / HPMS revenue | $249.0 million / $210.7 million (HPMS +26%) | | Gross margin (GAAP) | 52.6% | | Operating income (GAAP) | $84.4 million, 18.4% of revenue | | Operating income (non-GAAP) | $106.7 million | | Net income / diluted earnings per share (GAAP) | $76.9 million / $1.47 | | Diluted earnings per share (non-GAAP) | $1.84 ($96.1 million) | | Stock compensation | $20.6 million | | Interest income | $10.1 million | | Operating cash flow / free cash flow | $64.1 million / $48.6 million | | Share repurchases | $31.5 million (a year earlier $100.0 million) | | Cash and investments | $1,167.3 million, no borrowings | The outlook for the September quarter is revenue of $510 million to $570 million, a GAAP gross margin of 52% to 54% and GAAP research and development plus selling and administrative costs of $163 million to $169 million. The company gives no earnings per share guide. The gap between GAAP and non-GAAP profit is stock compensation and related costs, which is a real cost to shareholders, so I work from the GAAP figures. Two details deserve a second look. The repurchase fell to $31.5 million from $100.0 million a year earlier, and research and administrative costs are guided to about $166 million a quarter, against roughly $157 million in the June quarter (my arithmetic). Both fit a company that expects a quieter stretch than the June quarter suggests. ## Which cash to value I value owner cash: operating cash flow minus all capital spending minus stock compensation. For Cirrus, stock compensation is about $82 million a year, which is 14% of free cash flow, so ignoring it would flatter the numbers. | $ million | Free cash flow | Stock compensation | Owner cash | | --- | --- | --- | --- | | FY2025 (April to March) | 421.6 | 84.1 | 337.4 | | FY2026 | 636.6 | 81.8 | 554.8 | | Twelve months to June 2026 | 572.1 | 81.6 | 490.5 | | FY2027 normalized (my estimate) | | | 373.0 | Free cash flow is seasonal: the December and March quarters delivered 68% of the fiscal 2026 total. The jump from FY2025 to FY2026 (+51%) also started from a depressed base that had a large working capital outflow, so it is partly a recovery and not a trend. The normalized figure is deliberately lower than the recent run rate. I take revenue of $2,080 million (the first half of $999.7 million, using the middle of the September quarter guide, and a second half 5% above last year's) and an operating margin of 21.4%, which implies about 22% in the second half (my arithmetic). Operating profit is $445 million. After 18% tax, plus about $8 million because depreciation exceeds capital spending (my estimate), owner cash is **$373 million**, 24% below the twelve-month figure of $490 million. The difference is interest on $1.17 billion of cash (about $40 million before tax, which I exclude because I add the cash separately), a $34 million working capital inflow and the higher costs in the guide. A 24% gap sits just inside my 25% limit, so a simple multiple is allowed, and I add a scenario model as a check. Cash is counted once. The $1,167.3 million is $810.7 million of cash, $80.6 million of current securities and $276.1 million of long-term securities. Operating lease liabilities of about $130 million are not deducted, because the rent is already inside operating profit. ## Shares and buybacks Basic shares were 50.6 million and diluted 52.4 million in the quarter, and 50.45 million were outstanding at June 27, against 51.31 million a year earlier, a reduction of 1.7%. The company repurchased about $251 million of stock over the last twelve months. I use 52.4 million diluted shares and assume no further reduction, since buying shares is a use of cash and not free growth. The release does not state what is left of the buyback authorization, and I found no dividend in it. ## The primary valuation: owner cash times a multiple For a chip designer whose cash flow swings widely with one customer's product cycle I use the 8 to 10 times range. I take the top of it, 10 times, because the company has net cash and no debt. The result is (normalized owner cash of $373.0 million times 10, plus cash of $1,167.3 million) divided by 52.4 million shares, or **$93.46** a share. | Multiple of owner cash | 8 times | 9 times | 10 times | 11 times | 12 times | | --- | --- | --- | --- | --- | --- | | Value per share | $79.22 | $86.34 | $93.46 | $100.58 | $107.70 | All of the value in this method sits in the capitalized run rate, so the continuation value is 100% of the total. The scenario model below puts a calendar on the same business. ## The secondary valuation: enterprise value to operating profit Fiscal 2027 operating profit of $445.1 million times 10 gives an enterprise value of $4,451 million. Adding cash of $1,167.3 million and dividing by 52.4 million shares gives **$107.22**. At 8 times it is $90.23 and at 12 times $124.21. I did not obtain a peer table, so the multiple is my assumption. This method is not independent of the first: both depend on the same margin and growth for fiscal 2027. The two Base values are $93.46 and $107.22, a gap of 13.7%, inside my 20% tolerance. I weight the first method 60% and the second 40%: 0.6 times $93.46 plus 0.4 times $107.22 is **$98.97**. Their agreement does not raise Confidence, because they share a driver. ## Bear, Base and Bull The scenario model takes the rest of fiscal 2027 (70% of the normalized owner cash, because the cash arrives mostly in the December and March quarters) and then fiscal 2028 to 2030, discounts at 10% and applies a terminal multiple to the last year. Owner cash each year is revenue times margin times (1 minus 18% tax), plus $8 million. All inputs are my assumptions. | Case | Revenue growth FY28 / 29 / 30 | Operating margin | Terminal multiple | | --- | --- | --- | --- | | Bear (Apple loses content or share) | -15% / -10% / 0% | 16% / 14% / 14% | 7 times | | Base | +3% / +3% / +3% | 21.4% | 10 times | | Bull (more content at its largest customer, new device wins) | +9% / +9% / +8% | 23% / 24% / 24% | 12 times | | $ million | Owner cash (rest of FY27 / FY28 / FY29 / FY30) | Present value of flows | Present value of terminal | Cash | Equity value | Value per share | | --- | --- | --- | --- | --- | --- | --- | | Bear | 261 / 240 / 191 / 191 | 748 | 962 | 1,167 | 2,877 | $54.90 | | Base | 261 / 384 / 395 / 407 | 1,191 | 2,931 | 1,167 | 5,290 | $100.95 | | Bull | 261 / 436 / 494 / 533 | 1,406 | 4,610 | 1,167 | 7,184 | $137.09 | The Base of the scenario model ($100.95) is close to the triangulated Base. The probabilities are 25% Bear, 55% Base and 20% Bull, which gives $96.67. The Bear is a loss of Apple content: revenue falls by a quarter over three years and the margin drops to 14%. It is possible, and it is why the margin of safety is large. If the loss were deeper, the Bear is not a floor. | Base value per share | Terminal 8 times | Terminal 10 times | Terminal 12 times | | --- | --- | --- | --- | | Discount rate 8% | $93.53 | $105.44 | $117.36 | | Discount rate 10% | $89.76 | $100.95 | $112.14 | | Discount rate 12% | $86.28 | $96.80 | $107.31 | ## What the price already assumes At $110.49 the market value is $5,790 million. Less cash of $1,167 million, the enterprise value is $4,622 million, which is 10.4 times fiscal 2027 operating profit and 12.4 times my normalized owner cash. On trailing earnings it is 13.4 times, and the owner cash yield is 6.4%. For a company with one customer, 12.4 times owner cash is above the top of the 8 to 10 times range I use. The market is paying for a continuation of the current content level, and a little more. On growth quality: the revenue guide for the next quarter is down, and I do not compute a growth-adjusted price to earnings ratio, because the next twelve months of growth are flat to down on the guide. The 51% rise in free cash flow in fiscal 2026 is a recovery from a low base and working capital, not a growth rate I would extrapolate. ## Sensitivity | Change one input at a time (owner cash method, 10 times) | Low | Middle | High | | --- | --- | --- | --- | | Operating margin 18% / 21.4% / 24% | $82.39 | $93.46 | $101.92 | | Revenue $1,800 / $2,080 / $2,300 million | $84.08 | $93.46 | $100.83 | | Diluted shares 50.6 / 52.4 / 54.0 million | $96.78 | $93.46 | $90.69 | | Cash $896 million (a year ago) / $1,167 million | $88.28 | $93.46 | | No single reasonable change brings the maximum buy price near the share price. The Base would have to be about $201 for $110.49 to be a 45% discount. ## How the buy price is set Confidence C calls for a margin of safety of 35% to 50%. I use 45%: 40% as a base for this grade, plus 5 points because 91% of sales sit with one customer. Foundry and tariff exposure sit in the Bear case, the discount rate is tested, the multiple is tested between 8 and 12 times and data limits sit in the Confidence score, so none of them is charged twice. The maximum buy price is $98.97 times (1 minus 45%) = **$54.43**. At 40% it would be $59.38 and at 50% $49.48. It is a decision reference, not an order to place. ## Reasons to own - **A clean balance sheet.** $1.17 billion of cash and investments, about 20% of the market value, and no borrowings. - **Real cash generation.** Free cash flow was $636.6 million in fiscal 2026 with capital spending of about $26 million a year. - **A growing second segment.** HPMS revenue rose 26% in the June quarter, faster than the company as a whole. - **Share count shrinking.** The count fell 1.7% in a year. These reasons justify research and monitoring. They do not show that $110.49 offers the downside buffer I require. ## What could go wrong? - **One customer.** About 91% of sales come from Apple. A decision to design out a component, move to another supplier or ship fewer devices would show up directly in revenue. - **The cycle.** The September quarter is guided 3.7% below a year ago at the midpoint, after a quarter that grew 12.9%. - **Foundry and geography.** A substantial majority of wafers come from TSMC in Taiwan, and the GlobalFoundries agreement runs through calendar 2026. - **Margins.** GAAP operating margin was 18.4% in the June quarter and costs are guided up to about $166 million a quarter, from roughly $157 million. - **Less buyback.** The repurchase was $31.5 million against $100.0 million a year earlier, and I could not find how much of the authorization is left. ## Management execution The record is steady rather than spectacular. The company delivered $636.6 million of free cash flow in fiscal 2026, up 51%, and guides the next quarter openly, but it gives no earnings per share guide, so there is less to hold it to. The slower buyback is the first sign I would watch for a change of tone. I give management 7 of 10 in business quality and capital allocation 8 of 10. ## Stock Analyza scorecard | Business quality | Points | Maximum | | --- | --- | --- | | Moat and technology | 13 | 20 | | Revenue durability | 8 | 20 | | Cash conversion and margins | 13 | 15 | | Balance sheet | 15 | 15 | | Capital allocation | 8 | 10 | | Management credibility | 7 | 10 | | Customer and supply risk | 3 | 10 | | Total | 67 | 100 | Business quality is a judgment, not an audited figure. The valuation score is 26 of 100: 4 of 40 for the discount to Base (the price is above it), 2 of 20 for protection against the Bear (50.3% below the price), 9 of 15 for agreement between methods, 5 of 10 for history (not reviewed, so neutral), 3 of 10 for what the price implies and 3 of 5 for data reliability. These are my judgments and not a formula. Business quality and valuation are separate numbers and are never blended. ## Confidence score | Component | Points of 5 | | --- | --- | | Data quality and provenance | 4 | | Business predictability | 2 | | Scenario dispersion | 2 | | Model risk | 3 | | Independence of methods | 3 | | Total, grade C (13 to 17) | 14 of 25 | Predictability and dispersion score low because one customer decides the outcome and the Bull value is 2.5 times the Bear. The reported numbers are good. What is missing is a peer table, a multi-cycle history of the cash flow and the second-quarter results due on November 4. ## What I would watch from here ### Supports the thesis - Revenue growth above 5% year on year and HPMS growth above 10%. - GAAP operating margin above 22%. - Apple's share of sales below 80%, and quarterly buybacks above $75 million. ### Watch closely - Revenue growth between 0% and 5% (the September guide is below zero), GAAP operating margin between 18% and 22% (18.4% now). - Apple's share of sales between 80% and 90%. - Net cash and investments between $0.6 billion and $1.0 billion. ### Breaks the thesis - Revenue falling year on year in two quarters, or GAAP operating margin below 18%. - Apple's share above 90% with falling revenue, or evidence that content per device is being cut or moved in house. - Net cash and investments below $0.6 billion. Two readings are already red or close today: Apple's 91% share and the $31.5 million buyback. The thresholds are my monitoring triggers, not company guidance. The next review is the September quarter report on November 4, 2026. ## The three most important thesis breakers - **Apple reduces content or in-sources parts.** Revenue falls quickly and the 10 times multiple is too high. - **A guide below the range.** A September or December quarter forecast below $510 million would put the Bear case in play. - **Margin below 18%.** A margin that stays under 18% leaves too little owner cash for 10 times to hold. ## Stress test and independent check I rebuilt all of the numbers in a separate script: the owner cash series, the normalized cash, the multiple table, the three scenarios and their discounting, the nine-cell grid, the triangulation, the buy prices and the reverse valuation. They match the article. Facts come from Cirrus Logic's first quarter fiscal 2027 release and its fiscal 2026 annual report. Quarterly cash flow and prices come from stockanalysis.com, whose $110.49 close of October 22 I use. The estimated inputs are the normalized margin of 21.4% and revenue of $2,080 million, the 18% tax rate, the $8 million difference between depreciation and capital spending, the multiples and the discount rate. The weakest point is that both valuation methods rest on the same fiscal 2027 margin. | Test | Value per share | Entry at 45% margin of safety | Effect | | --- | --- | --- | --- | | Owner cash method alone | $93.46 | $51.40 | Price above entry | | Operating profit method alone | $107.22 | $58.97 | Price above entry | | Owner cash at 12 times | $107.70 | $59.24 | Price above entry | | Operating profit at 12 times | $124.21 | $68.32 | Price above entry | | Scenario Base at 8% and a terminal 12 times | $117.36 | $64.55 | Price above entry | The most generous combination I tested gives an entry price of $68.32, and the share price is 61.7% above it. The strongest case against the Hold is that HPMS keeps growing and Apple adds content: that is the Bull case at $137.09. The strongest case against owning is that the September guide is the start of a downturn in a business with one buyer. I give weight to both, which is why the verdict is Hold. Data limits: one price source, quarterly cash flow from an aggregator, no peer table, no multi-cycle history, an estimated depreciation figure, and no disclosure of the remaining buyback authorization or of how a new debt facility fee in the quarter will be used. ## Final verdict: hold at $110.49 Cirrus Logic is a well-run business with a clean balance sheet. The problem is the price relative to the risk: 91% of sales sit with one customer, yet the shares already trade above the top of the range I use for that kind of company. **Verdict: HOLD at $110.49. Triangulated Base value $98.97, the price is 11.6% above it, Confidence C (14/25), required margin of safety 45%, maximum buy price $54.43. Main thesis breaker: Apple reducing content or in-sourcing parts, or a revenue guide below $510 million.** For holders this is a review, not an instruction to sell. For new money it means waiting for a price near $54 to $59, or for the September quarter report to show that the guide was cautious. ## More analyses on Patreon This analysis is free. Premium members get every in-depth analysis, the full archive and a vote on which stocks get analyzed next: https://www.patreon.com/stockanalyza ## Sources Primary sources are Cirrus Logic's [first quarter fiscal 2027 results release](https://www.sec.gov/Archives/edgar/data/0000772406/000077240626000036/pressrelease.htm) and its [annual report for fiscal 2026](https://www.sec.gov/Archives/edgar/data/0000772406/000077240626000018/crus-20260328.htm). The price and the quarterly cash flow statements come from [stockanalysis.com](https://stockanalysis.com/stocks/crus/). The $110.49 price is the October 22, 2026 regular session close. Per share values use 52.4 million diluted shares. The multiples, discount rates, normalized margin and tax rate are analytical assumptions, not company guidance. **Disclaimer.** This analysis is provided solely for research and educational purposes. It is not personalized investment, financial, legal or tax advice. Values are estimates, not forecasts or trading instructions. Cirrus Logic depends on one customer for most of its sales and on a single foundry region for its wafers, and its results follow a product cycle. Investors can lose part or all of their invested capital. Method: Master Investment Analysis Framework v3.4. Approach: normalized owner cash cross-checked with enterprise value to operating profit and a three-case scenario model, cash counted once. Confidence: C/14. Data checks: passed with warnings. Open data gaps: peer valuation, multi-cycle cash flow history and the remaining buyback authorization.