CREE Shines a Bright Light
Cree, Inc. (CREE - Analyst Report) is one of the leading producers of SiC and GaN-based LEDs. September quarter results exceeded the consensus on both the top and bottom lines. Forward guidance is for a 1-4% growth in the December quarter.
The global movement to energy-efficient lighting is prompting lighting companies and consumers to look at other options. Therefore, lighting will be the strongest end-market for Cree, likely followed by video displays and notebooks.
Yield improvements, higher capacity utilization, larger wafers and offshore production will increasingly offset new product ramp up costs. The LED market is hot, in our opinion, and CREE has adopted a bold strategy for growth. We are reiterating our BUY rating on CREE shares.
Sejuti Banerjea contributed to this report.