Cirrus Logic, Inc. (CRUS) DCF Valuation & Fundamental Primer
Cirrus Logic, Inc. (CRUS) currently trades at $118.34 with an enterprise value of $7.29B. Our proprietary institutional model rates Cirrus Logic, Inc. at 77/100 (Grade: A · High-Quality Compounder). The current market price prices in an implied 5-year revenue CAGR of 2.3% vs. historical growth of 8.5% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Cirrus Logic, Inc. (CRUS) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Cirrus Logic, Inc. (CRUS) 3-Scenario DCF Valuation Range
Stress-test CRUS's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $118.34).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $166.43 +41% | $176.13 +49% | $187.45 +58% | $200.83 +70% | $216.88 +83% |
| 9.3% | $150.57 +27% | $158.22 +34% | $166.99 +41% | $177.17 +50% | $189.12 +60% |
| 10.0% | $137.53 +16% | $143.67 +21% | $150.64 +27% | $158.60 +34% | $167.78 +42% |
| 10.8% | $126.61 +7% | $131.63 +11% | $137.27 +16% | $143.63 +21% | $150.86 +27% |
| 11.5% | $117.34 -1% | $121.50 +3% | $126.13 +7% | $131.31 +11% | $137.13 +16% |
Institutional Software Quality Scorecard (77/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Strong cash conversion; 100%+ of operating profit turns into free cash
Minimal dilution friction; management compensation aligned with shareholders
Sub-par gross margins; higher cost of delivery or hardware/services mix
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High cash conversion: 100%+ of operating income converted to free cash flow
- Low dilution friction: SBC is only 4.4% of revenue
- Net cash positive: $395.9M balance sheet buffer
Key Operational & Dilution Risks
- Lower software gross margins (52.5%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into CRUS?
Market implies 2.3% annual revenue growth over next 5 years (5.6% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (4.4% of revenue) and annual share dilution (0.5%/yr). Accounting for both requires 5.6% 5-year revenue CAGR to justify $118.34/sh on a true per-share economic cash flow basis.
Cirrus Logic, Inc. (CRUS) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $1.90B | $1.90B | $2.06B | $2.23B | $2.42B | $2.63B | $2.85B |
| Gross Profit | $996.0M | $996.0M | $1.08B | $1.17B | $1.27B | $1.38B | $1.50B |
| Operating Income (EBIT) | $410.4M | $410.3M | $445.1M | $482.9M | $523.8M | $568.2M | $616.4M |
| Stock-Based Compensation (SBC) | $84.1M | $84.2M | $91.3M | $99.1M | $107.5M | $116.6M | $126.5M |
| Unlevered Free Cash Flow (FCF) | $415.6M | $415.6M | $450.9M | $489.1M | $530.6M | $575.6M | $624.4M |
| SBC-Adjusted True Cash Flow | $331.5M | $331.4M | $359.5M | $390.0M | $423.1M | $459.0M | $497.9M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -16.8 + 0.57 × (Rule of 40) · R² = 76%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Cirrus Logic, Inc. | CRUS | $6.04B | $1.90B | 52.5% | 21.9% | 30.4% | 4.4% | 3.0× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 3.0× | $5.64B | $6.04B | $118.34 | 0.0% |
| -20% Multiple Compression | 2.4× | $4.51B | $4.91B | $96.22 | -20.0% |
| -35% Multiple Compression | 1.9× | $3.67B | $4.06B | $79.64 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $9.48B | $9.88B | $193.53 | +68.0% |
Frequently Asked Questions: Cirrus Logic, Inc. (CRUS) Valuation
What is Cirrus Logic, Inc. (CRUS)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Cirrus Logic, Inc. (CRUS) has a Base Case implied value of $150.65 per share (with a Bear Case of $85.11 and a Bull Case of $227.52), compared to its current price of $118.34. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Cirrus Logic, Inc. (CRUS)'s Rule of 40 score and Free Cash Flow margin?
Cirrus Logic, Inc. achieves a Rule of 40 score of 30.4%, combining a 8.5% revenue growth run-rate with a 21.9% TTM free cash flow margin on $1.90B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into CRUS stock according to Reverse-DCF analysis?
At $118.34 per share (Enterprise Value of $5.64B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 2.3%, compared to Cirrus Logic, Inc.'s historical CAGR of 8.5%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Cirrus Logic, Inc. compare to Software & Cloud Services software peers?
Cirrus Logic, Inc. (CRUS) earns an institutional Software Quality Score of 77/100 (Grade A — High-Quality Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Cirrus Logic, Inc. (CRUS)'s valuation?
Cirrus Logic, Inc. recorded $84.1M in TTM stock-based compensation (4.4% of revenue). When treating SBC as a cash-equivalent compensation expense, Cirrus Logic, Inc.'s SBC-adjusted free cash flow yield is 5.5%, scoring 25/25 on our Shareholder Dilution Friction pillar.