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Cree Stock Fell 5% on September 17


Sep. 18 2018, Published 8:00 a.m. ET

Cree trading at $39.99

In this series, we’ll look at the top technology stocks that fell on September 17 and compare them with analysts’ estimates. Then we’ll see if investors think they’re a good buy or not at their current prices.

Cree (CREE), the maker of lighting-class LED (light-emitting diode) and semiconductor products, fell 5.2% on September 17. The stock is currently trading at $39.99, which is 63% above its 52-week low of $24.45 and 23% below its 52-week high of $51.78.

The stock has risen 7.7% this year. However, so far in September, it has fallen ~17%.

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It seems that Cree has been impacted by the overall weakness in the semiconductor industry. Global semiconductor companies Western Digital (WDC), Micron (MU), Analog Devices (ADI), and Applied Materials (AMAT) have fallen 9.6%, 17%, 7.6%, and 10%, respectively, on analysts’ concerns over falling chip prices.

Cree generates ~26% of its sales from China. The ongoing tariff war has no doubt impacted the stock.

Robust revenue growth

While other semiconductor companies are experiencing a slowdown in terms of revenue and earnings growth, Cree’s revenue is estimated to rise 13% in fiscal 2019 and 12.5% in fiscal 2020.

Cree’s EPS is expected to rise 195% YoY (year-over-year) to $0.56 in fiscal 2019 and 118% YoY to $1.22 in fiscal 2020. It’s expected to rise at a significantly high compound annual growth rate of 118% over the next five years.

Of the 15 analysts tracking Cree, 13 have recommended a “buy” for the stock, and two have recommended a “hold.” There are no “sell” recommendations. The average 12-month target price for Cree is $46.60, indicating that it’s trading at a discount of 16.5% to its current price.


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