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Cirrus Logic, a Zacks Rank #1 (Strong Buy), is a fabless semiconductor supplier that develops high-precision, mixed-signal processing solutions. The company focuses on expanding markets where it can apply its processing knowledge to address challenging issues across the analog-to-digital divide.<\/p>\n<\/div>\n
The stock is displaying relative outperformance and has been making a series of 52-week highs. The price movement is a sign of strength as we head further into the new year. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.<\/p>\n<\/div>\n
Cirrus Logic is part of the Zacks Electronics \u2013 Semiconductors industry group, which currently ranks in the top 37% out of more than 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has throughout the past year:<\/p>\n<\/div>\n
Image Source: Zacks Investment Research<\/p>\n<\/div>\n
Stocks in this group are also expected to experience above average earnings growth, signifying a powerful foundation that should lead to higher prices. Historical research studies suggest that approximately half of a stock\u2019s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.<\/p>\n<\/div>\n
It\u2019s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top industries, we can dramatically improve our stock-picking success.<\/p>\n<\/div>\n
Cirrus Logic remains devoted to pursuing its three-pronged growth strategy: first, protecting its leadership in smartphone audio; second, enhancing the amount of high-performance mixed-signal (HPMS) content in smartphones; and third, exploiting its capabilities in audio and HPMS to penetrate new markets.<\/p>\n<\/div>\n
The company has been gaining momentum from increased smartphone demand and product diversification, with notable expansion into PCs, AI-enabled interfaces, and automotive markets. The PC market is relatively large and stable, and successful penetration there could meaningfully diversify revenue in the coming years.<\/p>\n<\/div>\n
Last year, Cirrus benefited from the launch of a next-generation boosted amplifier, enabling higher audio performance for mobile devices. The debut of Cirrus Logic\u2019s first 22-nanometer smart codec improved its technological leadership. It also continues to gain momentum in the laptop market with design wins on major platforms.\u00a0<\/p>\n<\/div>\n
Tech heavyweight Apple $AAPL<\/a> is working with Cirrus Logic to establish new semiconductor process technologies. Apple boasted that this collaboration will enable Cirrus to develop mixed-signal solutions for the company\u2019s applications, including advanced integrated circuits for Face ID systems.<\/p>\n<\/div>\n Cirrus Logic CRUS<\/a> has established an impressive reporting history, surpassing earnings estimates in each of the past four quarters. The company most recently delivered fiscal third-quarter earnings back in February of $2.97 per share, which marked a 22.7% surprise over the $2.42\/share consensus estimate.<\/p>\n<\/div>\n The precision audio and mixed-signal powerhouse delivered a trailing four-quarter average surprise of 31.8%. Consistently beating earnings estimates is a recipe for success.<\/p>\n<\/div>\n Analysts covering CRUS are in agreement and have raised their fourth-quarter estimates by 18.12% in the past 60 days. The Zacks Consensus Estimate now stands at $1.76\/share, reflecting potential growth of 5.4% relative to same period in the prior year.<\/p>\n<\/div>\n Image Source: Zacks Investment Research<\/p>\n<\/div>\n This market leader has seen its stock advance more than 30% already this year, all while the general market has struggled. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio \u2013 one that is trending well and receiving positive earnings estimate revisions.<\/p>\n<\/div>\n Image Source: StockCharts<\/p>\n<\/div>\n Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of higher highs in 2026. With both strong fundamental and technical indicators, CRUS stock is poised to continue its outperformance.<\/p>\n<\/div>\n Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Cirrus Logic has recently witnessed positive revisions. As long as this trend remains intact (and CRUS continues to deliver earnings beats), the stock will likely continue its bullish run.<\/p>\n<\/div>\n Backed by a leading industry group and history of earnings beats, it\u2019s not difficult to see why CRUS stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.<\/p>\n<\/div>\n Cirrus Logic is a cash-rich company with a strong balance sheet. The company\u2019s ability to generate solid cash flows is expected to help it sustain current share repurchases.<\/p>\n<\/div>\n Recent positive earnings estimate revisions should serve to create a \u2018floor\u2019 in terms of any sudden or unexpected downside moves. If you haven\u2019t already done so, be sure to put CRUS on your shortlist.<\/p>\n<\/div>\n This under-the-radar company specializes in semiconductor products that titans like NVIDIA don’t build. It’s uniquely positioned to take advantage of the next growth stage of this market. And it’s just beginning to enter the spotlight, which is exactly where you want to be.<\/p>\n With strong earnings growth and an expanding customer base, it’s positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.<\/p>\n See This Stock Now for Free >><\/a><\/div>\n Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report<\/a><\/p>\n<\/div>\nEarnings Trends and Future Estimates<\/strong><\/h2>\n
Let\u2019s Get Technical<\/strong><\/h2>\n
Bottom Line<\/strong><\/h2>\n
Zacks Names #1 Semiconductor Stock<\/h2>\n