Apple supplier getting crushedNovember 1, 2012: 1:50 PM ET
So, what gives?
Well, early Thursday, Felt & Co. downgraded Cirrus' stock to hold from strong buy, citing gross margin concerns and pricing pressure headwinds. Felt analyst Jeffrey Schreiner also cut his price target on the stock by $10 to $44. He said Cirrus remain innovative over the long term but cautioned investors should 'take a breath' after the recent run-up.
Cirrus was trading around $36 on Thursday. But the stock is up a whopping 130% so far this year.
Many StockTwits traders thought the sell-off was overblown.
The company, which makes microchips for Apple iPods, iPhones and iPads, gets 80% of its revenue from Apple so any changes to the supply chain agreement will impact Cirrus' bottom line too.
That's exactly what Schreiner was cautioning about. But Canaccord analyst Bobby Burleson says the gross margin/pricing pressure worries are overdone. He reiterated his buy rating on Cirrus and kept a price target of $52 on the stock.
Investors can be a fickle bunch. It seems like a little dose of reality is setting in. Yes, Cirrus has had a huge run-up. But maybe, just maybe, it can continue that trend.