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Cirrus Logic And The Challenges And Opportunities Of An Apple Relationship

Summary

Cirrus Logic fell amid reports of iPhone 6 supply order cuts, but rebounded on the rumor that its portable audio products could be a big part of Apple's iPhone 7.

CRUS derived 76% of its revenue from AAPL in the third quarter.

The stock trades at a forward P/E of 12, and is forecasting revenue growth of 27% in 2016 and over 15% in 2017.

Any company with a supply chain tie to Apple (NASDAQ:AAPL) has had a bumpy ride for the last two months. Ever since reports surfaced that Apple was planning on reducing output for the iPhone 6s and 6s Plus by up to 30% for the current quarter, suppliers of components to AAPL have seen their stocks drop in sympathy. After the news, companies like Qorvo (NASDAQ:QRVO) and Skyworks (NASDAQ:SWKS) came under pressure.

Cirrus Logic (NASDAQ:CRUS) has been the exception. While its stock fell early this year, it is actually up slightly since the beginning of December compared to Apple's 20% drop. Cirrus Logic dropped initially because of its ties to Apple, but, ironically, shot back up in the second half of January, thanks to its ties to AAPL.

Cirrus Logic's portable audio products like its noise-canceling...


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