Cirrus Logic (NASDAQ:CRUS) & CMC Materials (NASDAQ:CCMP) Critical Review

Cirrus Logic (NASDAQ:CRUSGet Rating) and CMC Materials (NASDAQ:CCMPGet Rating) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Cirrus Logic and CMC Materials, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cirrus Logic 1 1 11 0 2.77
CMC Materials 0 5 3 0 2.38

Cirrus Logic presently has a consensus target price of $105.57, suggesting a potential upside of 29.99%. CMC Materials has a consensus target price of $186.83, suggesting a potential upside of 4.53%. Given Cirrus Logic’s stronger consensus rating and higher possible upside, equities analysts clearly believe Cirrus Logic is more favorable than CMC Materials.

Profitability

This table compares Cirrus Logic and CMC Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cirrus Logic 18.32% 23.52% 17.25%
CMC Materials 8.85% 23.55% 9.97%

Insider & Institutional Ownership

86.7% of Cirrus Logic shares are held by institutional investors. Comparatively, 93.7% of CMC Materials shares are held by institutional investors. 2.0% of Cirrus Logic shares are held by insiders. Comparatively, 2.4% of CMC Materials shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Cirrus Logic has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, CMC Materials has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Earnings and Valuation

This table compares Cirrus Logic and CMC Materials’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cirrus Logic $1.78 billion 2.56 $326.36 million $5.52 14.71
CMC Materials $1.20 billion 4.26 -$68.58 million $3.82 46.79

Cirrus Logic has higher revenue and earnings than CMC Materials. Cirrus Logic is trading at a lower price-to-earnings ratio than CMC Materials, indicating that it is currently the more affordable of the two stocks.

Summary

Cirrus Logic beats CMC Materials on 8 of the 14 factors compared between the two stocks.

About Cirrus Logic (Get Rating)

Cirrus Logic, Inc., a fabless semiconductor company, provides low-power, high-precision mixed-signal processing solutions in the United States and internationally. It offers portable products, including codecs-chips that integrate analog-to-digital converters (ADCs) and digital-to-analog converters (DACs) into a single IC; smart codecs, a codec with digital signal processer; boosted amplifiers; micro-electromechanical systems microphones; haptic drivers; digital signal processors; and SoundClear technology, which consists of a portfolio of tools, software, and algorithms that offer enhanced voice quality, voice capture, and audio playback features. The company's audio products are used in smartphones, tablets, wireless headsets, laptops, AR/VR headsets, home theater systems, automotive entertainment systems, and professional audio systems. It also offers high-performance mixed-signal products, such as haptic driver and sensing solutions, camera controllers, and power-related components used in various industrial and energy applications comprising digital utility meters, power supplies, energy control, energy measurement, and energy exploration. The company markets and sells its products through direct sales force, external sales representatives, and distributors. Cirrus Logic, Inc. was incorporated in 1984 and is headquartered in Austin, Texas.

About CMC Materials (Get Rating)

CMC Materials, Inc., together with its subsidiaries, provides consumable materials to semiconductor manufacturers, and pipeline and adjacent industry customers in North America, Asia, Europe, the Middle East, Africa, and South America. The company operates in two segments, Electronic Materials and Performance Materials. The Electronic Materials segment develops, produces, and sells chemical mechanical planarization (CMP) slurries for polishing various materials used in IC devices, including tungsten, dielectric materials, copper, tantalum, and aluminum; and various materials that are used in the production of disk substrates and magnetic heads for hard disk drives; and CMP pads, which are used in conjunction with slurries in the CMP process. This segment also offers sulfuric, phosphoric, nitric, and hydrofluoric acids, as well as ammonium hydroxide, hydrogen peroxide, isopropyl alcohol, other specialty organic solvents, and various blends of chemicals; and develops and manufactures consumable products for cleaning advanced probe cards and test sockets. The Performance Materials segment provides pipeline and industrial materials comprising polymer-based drag-reducing agents for crude oil transmission, valve greases, cleaners and sealants, and related services and equipment; and routine and emergency maintenance services, as well as training services. This segment also offers precision polishing and metrology systems for advanced optics applications; and magneto-rheological polishing fluids, consumables, and spare and replacement parts, as well as optical polishing services and other customer support services; and engages in the wood treatment business. The company was formerly known as Cabot Microelectronics Corporation and changed its name to CMC Materials, Inc. in October 2020. CMC Materials, Inc. was incorporated in 1999 and is headquartered in Aurora, Illinois.

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