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Cray Inc. Message Board

  • historymirror historymirror Aug 1, 2013 9:52 PM Flag

    Is Cray a bubble?

    Dismissing unicorn farts as the reason for the stock price jump, why is Cray valued so highly?
    Cray earned one cent per share during the past 12 months on revenue of $388.6 million with a gross profit of $122.3 million and $73.5 million in R&D expense. Yahoo analyst estimates for 2013 & 2014 revenue and earnings per share are: $500 million/ $549 million and $2/share / $2 per share, respectively. Revenue and earnings per share for the first half of 2013 is $164 million / (.21 per share). Insiders have sold over $7 million in Cray stock so far this year. Assuming Cray hits the 2013 target at $0.51 per share then at its current price it would have a PE of 55. Analysts project 10% revenue growth for 2014 with earnings at $0.69 per share or a PE of 41. Today's closing stock price is $3/share above the high analyst target. The risk/reward seems askew, notwithstanding the allure of "Big Data".
    Other than unicorns, what justifies the current valuation?

    Sentiment: Strong Sell

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