A week ago, Cirrus Logic, Inc. (NASDAQ:CRUS) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 8.9% to hit US$556m. Cirrus Logic also reported a statutory profit of US$2.11, which was an impressive 27% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Cirrus Logic

Following last week's earnings report, Cirrus Logic's six analysts are forecasting 2026 revenues to be US$1.87b, approximately in line with the last 12 months. Statutory earnings per share are forecast to reduce 2.9% to US$5.58 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.86b and earnings per share (EPS) of US$5.35 in 2026. So the consensus seems to have become somewhat more optimistic on Cirrus Logic's earnings potential following these results.

The consensus price target was unchanged at US$131, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Cirrus Logic, with the most bullish analyst valuing it at US$140 and the most bearish at US$115 per share. This is a very narrow spread of estimates, implying either that Cirrus Logic is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Cirrus Logic's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 8.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Cirrus Logic.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Cirrus Logic's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cirrus Logic's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Cirrus Logic. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Cirrus Logic going out to 2027, and you can see them free on our platform here..

We also provide an overview of the Cirrus Logic Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.