CIRRUS LOGIC INC (NASDAQ:CRUS) is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

CIRRUS LOGIC INC (NASDAQ:CRUS) has caught the attention of our stock screener as a great value stock. CRUS excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Assessing Valuation for CRUS

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of CRUS, the assigned 7 reflects its valuation:

• Based on the Price/Earnings ratio, CRUS is valued cheaper than 84.40% of the companies in the same industry.
• When comparing the Price/Earnings ratio of CRUS to the average of the S&P500 Index (28.13), we can say CRUS is valued rather cheaply.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of CRUS indicates a rather cheap valuation: CRUS is cheaper than 86.24% of the companies listed in the same industry.
• When comparing the Price/Forward Earnings ratio of CRUS to the average of the S&P500 Index (21.03), we can say CRUS is valued slightly cheaper.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CRUS indicates a rather cheap valuation: CRUS is cheaper than 80.73% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, CRUS is valued cheaper than 97.25% of the companies in the same industry.
• CRUS has an outstanding profitability rating, which may justify a higher PE ratio.

Profitability Insights: CRUS

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of CRUS, the assigned 8 is noteworthy for profitability:

• The Return On Assets of CRUS (12.91%) is better than 82.57% of its industry peers.
• CRUS has a Return On Equity of 15.54%. This is in the better half of the industry: CRUS outperforms 77.98% of its industry peers.
• CRUS has a better Return On Invested Capital (12.68%) than 83.49% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for CRUS is above the industry average of 11.33%.
• CRUS has a better Profit Margin (16.55%) than 73.39% of its industry peers.
• In the last couple of years the Profit Margin of CRUS has grown nicely.
• CRUS's Operating Margin of 20.44% is fine compared to the rest of the industry. CRUS outperforms 78.90% of its industry peers.
• CRUS's Operating Margin has improved in the last couple of years.
• Looking at the Gross Margin, with a value of 52.18%, CRUS is in the better half of the industry, outperforming 70.64% of the companies in the same industry.

Health Assessment of CRUS

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. CRUS was assigned a score of 10 for health:

• An Altman-Z score of 8.72 indicates that CRUS is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 8.72, CRUS belongs to the top of the industry, outperforming 82.57% of the companies in the same industry.
• There is no outstanding debt for CRUS. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
• A Current Ratio of 5.93 indicates that CRUS has no problem at all paying its short term obligations.
• With an excellent Current ratio value of 5.93, CRUS belongs to the best of the industry, outperforming 84.40% of the companies in the same industry.
• CRUS has a Quick Ratio of 4.62. This indicates that CRUS is financially healthy and has no problem in meeting its short term obligations.
• Looking at the Quick ratio, with a value of 4.62, CRUS belongs to the top of the industry, outperforming 82.57% of the companies in the same industry.

What does the Growth looks like for CRUS

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. CRUS has achieved a 5 out of 10:

• The Earnings Per Share has grown by an nice 13.38% over the past year.
• CRUS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.11% yearly.
• CRUS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.58% yearly.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Check the latest full fundamental report of CRUS for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.