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Cree (CREE) Gains But Lags Market: What You Should Know

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Cree (CREE - Free Report) closed at $53.82 in the latest trading session, marking a +0.2% move from the prior day. This change lagged the S&P 500's 0.3% gain on the day. At the same time, the Dow lost 0.38%, and the tech-heavy Nasdaq gained 0.44%.

Coming into today, shares of the maker of energy-efficient lighting had gained 3.61% in the past month. In that same time, the Computer and Technology sector gained 4.56%, while the S&P 500 gained 2.91%.

CREE will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.16, up 300% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $397.87 million, up 11.77% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.78 per share and revenue of $1.64 billion. These totals would mark changes of +310.53% and +9.79%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for CREE. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. CREE currently has a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, CREE is holding a Forward P/E ratio of 68.71. Its industry sports an average Forward P/E of 10.31, so we one might conclude that CREE is trading at a premium comparatively.

It is also worth noting that CREE currently has a PEG ratio of 3.44. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. CREE's industry had an average PEG ratio of 1.04 as of yesterday's close.

The Semiconductor - Discretes industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 97, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.




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