What happened

Shares of Cirrus Logic (NASDAQ:CRUS) fell 10.3% in February 2017, according to data from S&P Global Market Intelligence.

So what

Cirrus reported third-quarter earnings on the first day of February, easily beating analyst forecasts on both the top and bottom lines. But the company's guidance for the fourth quarter came in below Wall Street's expectations, and share prices tumbled more than 13% on the beat-and-slash performance.

Woman holding up two wireless earbuds.

Image source: Getty Images.

Now what

About 85% of Cirrus' third-quarter revenue came from a single customer, widely believed to be Apple (NASDAQ:AAPL). Strong sales to this client drove sales sky-high in this report. For the next quarter, the strong sales trend should continue -- but analysts were hoping for an even sharper growth spurt.

As a supplier of audio chips for iPhones, iPads, and iPods, Cirrus' fortunes tend to wax and wane with consumer demand for Apple products -- and with Apple's internal forecasts for the expected sales performance of future releases. That's especially true now that Apple has exorcised traditional headphone jacks from its latest iPhone models, replacing them with a unique wireless technology powered by Cirrus chips on both sides of the phone/headphone connection.

Analysts were hoping for a much greater Apple tailwind in the spring quarter than Cirrus' own forecasts could support. I'll note that Cirrus shares still show a strong 50% return over the last 52 weeks, handily outperforming both Apple and the S&P 500 on the strength of Apple's wireless audio orders. And even so, the stock trades at a very reasonable 15 times trailing earnings.

Cirrus Logic may have taken a rabbit punch in February, but still holds a rare combination of growth and value qualities. Always worth a second look.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.