Cirrus Logic: A Top Analyst Pick Faces Institutional Skepticism

Shares of Cirrus Logic find themselves at a curious crossroads this week, caught between a prominent bullish endorsement and significant selling pressure from major funds. The contrasting moves present a puzzle for investors weighing the semiconductor company's prospects.

Recent portfolio disclosures highlight a clear divergence in strategy among large investors. While some institutions are building their stakes, others are taking profits or reducing exposure.

• Russell Investments increased its holding by purchasing an additional 11,595 shares, a rise of 12.2%.
• In a starkly opposite move, Panagora Asset Management sold a substantial 218,286 shares, slashing its position by 45.5%.
• JPMorgan Chase also trimmed its exposure, reducing its holdings by 4.5%.

This institutional tug-of-war raises a critical question: are these sales simply tactical profit-taking following a strong run, or do they signal deeper concerns about the company's fundamentals?

The Bull Case: Earnings Momentum Drives Optimism

The primary source of positive sentiment stems from Zacks Equity Research, which recently named Cirrus Logic its "Bull of the Day." The firm reaffirmed a Zacks Rank #1 (Strong Buy) rating, citing powerful earnings momentum.

Should investors sell immediately? Or is it worth buying Cirrus Logic?

The consensus earnings per share (EPS) estimate for fiscal 2025 has been revised sharply upward over the past 60 days, jumping from $7.07 to $7.73. This optimism is fueled by the latest quarterly results, where the company reported an adjusted EPS of $2.83, surpassing expectations by a significant 17.9%.

Contrasting Signals: Consensus Targets vs. Insider Sales

The broader analyst community maintains a "Moderate Buy" consensus on the stock, with an average price target of $141.67. Some firms, including Susquehanna and Stifel, have even raised their targets to between $150 and $155.

However, this fundamental optimism is juxtaposed against notable selling activity. The institutional sales by Panagora are accompanied by insider transactions; company insiders have disposed of shares worth $3.86 million over the last 90 days.

The Path Forward

The coming quarters will determine whether the elevated earnings expectations are justified. The key challenge for the stock is whether the momentum from its "Bull of the Day" status can attract sufficient new capital to counterbalance the selling pressure from existing shareholders. The battle for direction around the $150 price level is likely to be decisive.