What happened

Shares of analog and mixed-signal semiconductor designer Cirrus Logic (CRUS 1.54%) fell 11.6% in August, according to data from S&P Global Market Intelligence. The month started with an 8% rise in anticipation of a strong first-quarter earnings report. The report itself was indeed fantastic, but investors were left frustrated by modest guidance for the next quarter.

So what

Cirrus Logic's sales rose 2% year over year to $243 million, far ahead of Wall Street's $225 million consensus estimates. Earnings rose 51% to $0.53 per share, also above the Street's $0.30 target. But the midpoint of management's second-quarter revenue guidance stopped at $310 million, slightly below the then-current analyst projection of roughly $315 million. On the earnings call, CFO Thurman Case conceded that his company's largest customer has said that the next-generation iPhone is running a few weeks late, and that assumption was included in Cirrus Logic's guidance calculations.

Two hands give thumbs-up and thumbs-down signs in front of several uncut silicon wafers.

Image source: Getty Images.

Now what

Moreover, Apple (AAPL -0.60%) is planning to get rid of analog headphone functions altogether in the iPhone line, which would reduce the number of chips that Cirrus Logic supplies to each phone. On the other hand, Apple has ordered a new power conversion chip from Cirrus, a custom product that is "not something that exists today," in the words of CEO Jason Rhode.

"It's kind of a new thing that a customer thinks they are going to drive some value from," Rhode said, adding that it would be difficult to provide an "appropriate clue" about it.

So Cirrus seems to have some exciting new iPhone content on hand that might play into the 2021 launch cycle rather than the iPhone event that Apple has planned for Sept. 15. Investors can be impatient, which is why Cirrus shares started sliding after the first-quarter report.

Personally, I think that Cirrus Logic's stock is taking an overly harsh punishment for a short-term delay that shouldn't damage the company's business in the long run. And I can't wait to hear exactly what iPhone features that unheard-of new power controller might support next year.

Given this solid long-term outlook, Cirrus looks like a buy at these low prices, trading at just 15 times free cash flow and 20 times earnings.