Soaring iPhone Sales Have Supercharged This Under-the-Radar Stock That's Outperforming Apple. Buy It Before It Soars Another 59%

Cirrus Logic reported fiscal Q4 revenue of $449 million, up 6% year over year, with EPS rising 17% to $1.95 and full-year EPS increasing 23% to $9.26. Management guided to $460 million in current-quarter revenue at the midpoint, implying 13% growth, while the company also highlighted new Apple business tied to Face ID and mixed-signal solutions. The article argues that Apple-driven demand and a low 4.5x sales valuation could leave Cirrus Logic with roughly 59% upside if growth outpaces analyst expectations.

Analysis

The key second-order takeaway is that CRUS is no longer just an iPhone beta; it is becoming a content-attach story. As Apple pushes more silicon integration around sensing, Face ID, haptics, and power management, the mix shift should matter more than headline unit growth because it expands wallet share per device and supports gross margin durability even if the smartphone market only grows low single digits.

The market appears to be underpricing the duration of this upgrade cycle. If Apple’s installed base is still in a multi-year replacement window, CRUS gets a longer-than-expected runway of above-consensus revenue growth, and that matters because the stock is still being valued like a mature component supplier rather than a strategic design-win beneficiary. The real upside is not just near-term earnings beats; it is multiple expansion if investors begin to treat CRUS as a higher-quality, higher-visibility Apple content compounder.

The main risk is concentration, but concentration cuts both ways: consensus worries about Apple dependence are already known, while the incremental risk is actually execution around new sockets. If the Face ID ramp slips or Apple re-sources a portion of the design over the next 12-18 months, the valuation thesis de-rates quickly because the stock is implicitly discounting continued share gains. Near term, any Apple demand hiccup or a weaker-than-expected guide from CRUS is likely to be bought initially, but a second miss would likely compress the multiple faster than earnings would fall.

Contrarian angle: this may be less about undervaluation and more about the market still underestimating earnings power from mix. The stock can continue to work even without blockbuster iPhone unit growth if content per device rises meaningfully; that makes the setup more durable than a simple handset-volume trade. The cleanest expression is to stay long CRUS against lower-quality analog or mixed-signal peers that lack a comparable design-win pipeline.

Key Decisions for Investors

• Long CRUS on pullbacks over the next 2-6 weeks; risk/reward favors a re-rating if the market starts to price in incremental Apple content wins rather than just unit exposure.
• Use a CRUS/AAPL pair: long CRUS, short a smaller notional of AAPL for 3-6 months to isolate supplier-content upside versus handset-valuation saturation.
• Buy CRUS Jan/Apr call spreads 10-15% out of the money into the next earnings/guidance cycle; the thesis is a multiple expansion move if revenue cadence stays double-digit into the next quarter.
• If you are worried about Apple concentration risk, hedge a CRUS long with out-of-the-money puts 1-2 quarters out; this protects against a design-win delay while preserving upside if the new socket ramps.