If Cray's earnings were more stable, it would certainly carry a P/E more inline with its larger competitors. No doubt, the stock price is where it's at today because of the guidance given by the company. If it goes on a tear and happens to make a couple of sales, the price could sail well past the $25 target even with the current P/E; however, a little good news will have a lot of folks thinking it warrants a higher P/E, and that could send it to prices it hasn't seen in a decade. I guess what I'm saying is that bad news has exaggerated the price to the down side, and good news can exaggerate it to the upside.
I agree with you, but I also believe CRAY is in the infant stage of a longer (two year ?) term trend to $40 or more per share. Omne quarter does not make a year or two years. CRAY is debt free has good yearly earnings & could soar ANYTIME.