Is it safe to buy Cirrus Logic shares after solid FQ2 results?

On Tuesday, Cirrus Logic Inc. (NASDAQ:CRUS) shares edged slightly higher after announcing its most recent quarterly results. The company reported its FQ2 2022 revenue and earnings Monday after markets closed, beating the consensus for Street expectations. The semiconductor company also issued FQ3 revenue guidance in line with expectations and announced an additional $1 billion in share buybacks.

The company posted FQ2 non-GAAP earnings per share of $1.82, beating the average analyst estimate of $1.63. In addition, its GAAP EPS of $1.43 was above the consensus Street expectation of $1.32, while revenue for the quarter increased by 34.1% from the same period a year ago to $465.9 million, surpassing the average analyst estimate by $15.45 million.

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Cirrus Logic also issued FQ3 revenue guidance in the range of $490 million to $530 million, in line with the Street forecast of $500.38 million.

Is CRUS stock undervalued?

From an investment perspective, CRUS shares trade at an exciting forward P/E ratio of 14.96, making it an attractive option for value investors. 

In addition, analysts expect its earnings per share to grow by 37.20% this year, before rising at an average annual rate of 9.60% over the next five years.

Therefore, Cirrus Logic shares could also gain the attention of growth investors.

Technically, Cirrus Logic shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock spiked on Tuesday to retest the trendline resistance before pulling back towards the 100-day moving average.

However, with shares far from reaching overbought conditions, the current rally could continue for the foreseeable future. Therefore investors could target extended gains at about $86.14, or higher at $89.10, while $80.66 and $77.81 are crucial support levels.

It may not be too late to buy

In summary, although Cirrus Logic shares have rallied nearly 15% over the last five months, the stock is still down about 0.70% this year, thus leaving room for more downward movement.

Therefore, given the company’s exciting growth prospects and compelling valuation, it could be a good time to invest in CRUS shares.

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