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Cree (CREE) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Apple (AAPL) closed at $205.21 in the latest trading session, marking a +0.94% move from the prior day.

Cree (CREE) closed the most recent trading day at $62.06, moving +1.92% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.21%. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq lost 0.05%.

Prior to today's trading, shares of the maker of energy-efficient lighting had gained 15.26% over the past month. This has outpaced the Computer and Technology sector's gain of 5.1% and the S&P 500's gain of 2.57% in that time.

CREE will be looking to display strength as it nears its next earnings release, which is expected to be May 1, 2019. On that day, CREE is projected to report earnings of $0.16 per share, which would represent year-over-year growth of 300%. Our most recent consensus estimate is calling for quarterly revenue of $274.74 million, down 22.82% from the year-ago period.

CREE's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.38 billion. These results would represent year-over-year changes of +310.53% and -7.29%, respectively.

Investors should also note any recent changes to analyst estimates for CREE. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 3.4% higher within the past month. CREE is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note CREE's current valuation metrics, including its Forward P/E ratio of 77.9. This valuation marks a premium compared to its industry's average Forward P/E of 15.1.

Meanwhile, CREE's PEG ratio is currently 3.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor - Discretes industry currently had an average PEG ratio of 1.01 as of yesterday's close.

The Semiconductor - Discretes industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 2, which puts it in the top 1% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow CREE in the coming trading sessions, be sure to utilize Zacks.com.


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