Is Cirrus Logic A Good Long-Term Stock?

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Cirrus Logic (CRUS) stock lost 14.0% over the past year, while the S&P 500 returned 15.3%. The company has repurchased enough stock to reduce its share count by 7.6% in three years. Whether the stock suits a long-term holder depends on whether the company can keep paying for those buybacks from the cash its business generates. So what has the smaller share count done for each share you own?

Cirrus Logic’s Earnings Per Share Outgrew Net Income

Each share’s slice of the profit grew faster than the total profit itself. In the three years to June 2026, Cirrus Logic’s diluted earnings per share rose 45.4% a year, compared with 41.3% a year for net income. The share count fell in each of those three years, explaining most of the gap between the two growth rates. Both rates start from a weak year, when net income had fallen by more than half.

Over the last twelve months, buyback spending came to 3.0% of the company’s market value, net of stock paid to employees. Investors pay only 13.3 times earnings for the stock, compared with 22.9 for the S&P 500. At that price, each dollar Cirrus Logic spends on repurchases captures more earnings than it would at the index’s multiple.

How Cirrus Logic Pays For Buybacks

Cirrus Logic pays for its buybacks from the cash its business earns, not by borrowing. Management said revenue rose in fiscal Q1 2027 on higher sales of components shipping into smartphones, and it saw continued strong demand for custom boosted amplifiers and smart codecs. Over the last twelve months, operating profit accounted for 23.0% of sales, compared with 18.5% for the S&P 500.

Free cash flow totaled $571 million over that period, more than double the $251 million spent on buybacks, and the company pays no dividend. That free cash flow equals 10.0% of Cirrus Logic’s market value at the latest close. Cash and short-term investments also exceeded debt by $761 million at the end of June 2026, meaning the company does not need lenders to fund the buybacks.

Can Cirrus Logic Keep Buying Back Its Shares?

While twelve-month cash flow supports ongoing repurchases, cash generation slowed in the latest quarter. Free cash flow in fiscal Q1 2027 was $48.6 million, down from $113 million a year earlier. That figure falls below the roughly $63 million a quarter the company spent on buybacks, on average, over the past twelve months.

The stock has lost 33.8% over the past six months. On the August 5, 2026 call, management said its expectations for the PC business in fiscal 2027 have come down since May. Executives also said a gross margin lift in fiscal Q2 2027, from wafers bought at favorable pricing under earlier agreements, is temporary, and gross margin should normalize after that quarter.

Against that, management expects fiscal Q2 2027 revenue of $510 million to $570 million, up from $460 million in fiscal Q1. Cirrus Logic ended fiscal Q1 2027 with $239.6 million left under its buyback authorization, slightly less than it spent on buybacks over the past twelve months.

Cirrus Logic can fund repurchases from its business only as long as it earns more cash than it spends on shares. Free cash flow compared to buyback spending is the number to watch when the company reports fiscal Q2 2027 results, expected in November 2026.

Is Too Much Of Your Wealth Riding On One Stock?

Owning Cirrus Logic for its buybacks is a bet that takes years to pay off. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to protect a concentrated position and unwind it with less tax.

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