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Cirrus Logic, Inc. (CRUS) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Cirrus Logic, Inc. (CRUS)

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Intrinsic Value (DCF)

Current$123.28
→
Intrinsic$209.87
+70%
$145.36$209.87$332.37
Market implies 4% growth for 5 years
DCF analysis suggests CRUS could have 70% upside at 18% growth — verify assumptions match your view.
At $123, the market prices in only 4% growth — below historical 18%, suggesting low expectations.
Range: Bear $145 → Bull $332. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →14%16%18%20%
8%$253$274$296$320
10%$180$195$210$226
12%$140$151$162$174
14%$115$123$132$141

Bull Case

  • Bull case ($332) offers 170% upside at 21% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (4%) ≤ historical CAGR (18%)

Bear Case

  • Bear case ($145) with 14% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$489.78M
Year 2$577.18M
Year 3$680.17M
Year 4$801.54M
Year 5$944.57M
Terminal$13.90B

📐 Model Inputs

Growth Rate17.8%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$415.61MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is CRUS stock undervalued or overvalued?
🟢 UNDERVALUED

CRUS trades at $123.28 vs. our DCF-derived intrinsic value of $209.87, implying +71% upside. At a 10.0% WACC and 17.8% projected FCF growth, the market appears to be underpricing the present value of CRUS's future cash flows. The bear case ($142.35) still suggests upside, providing margin of safety.

What is CRUS's intrinsic value?

Using a 5-year DCF model: Base FCF of $416M, projected at 17.8% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-396M net debt and dividing by 0.06B shares: Bear $142.35 | Base $209.87 | Bull $307.77. Current price $123.28 implies +71% to base case.

How is CRUS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 17.8% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($11.20B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.9x.