NasdaqGS:CREE

Stock Analysis Report

Executive Summary

Cree, Inc. provides lighting-class light emitting diode (LED) and semiconductor products for power and radio-frequency (RF) applications in the United States, China, Europe, and internationally.

Rewards

Revenue is forecast to grow 16.65% per year

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Shareholders have been diluted in the past year



Snowflake Analysis

Adequate balance sheet and overvalued.


Similar Companies

Share Price & News

How has Cree's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CREE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.0%

CREE

1.0%

US Semiconductor

0.7%

US Market


1 Year Return

-1.8%

CREE

37.5%

US Semiconductor

18.2%

US Market

Return vs Industry: CREE underperformed the US Semiconductor industry which returned 37.5% over the past year.

Return vs Market: CREE underperformed the US Market which returned 18.2% over the past year.


Shareholder returns

CREEIndustryMarket
7 Day1.0%1.0%0.7%
30 Day-12.3%-1.4%1.5%
90 Day-8.9%6.9%5.0%
1 Year-1.8%-1.8%40.3%37.5%20.8%18.2%
3 Year60.6%60.6%82.1%71.8%45.2%35.8%
5 Year43.1%43.1%135.3%112.1%71.6%52.7%

Price Volatility Vs. Market

How volatile is Cree's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cree undervalued compared to its fair value and its price relative to the market?

2.31x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: CREE ($43.32) is trading above our estimate of fair value ($30.71)

Significantly Below Fair Value: CREE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CREE is unprofitable, so we can't compare its PE Ratio to the Semiconductor industry average.

PE vs Market: CREE is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CREE's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CREE is good value based on its PB Ratio (2.3x) compared to the US Semiconductor industry average (2.9x).


Next Steps

Future Growth

How is Cree forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

89.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CREE is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: CREE is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: CREE is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: CREE's revenue (16.7% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: CREE's revenue (16.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CREE's Return on Equity is forecast to be low in 3 years time (1.5%).


Next Steps

Past Performance

How has Cree performed over the past 5 years?

-41.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CREE is currently unprofitable.

Growing Profit Margin: CREE is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CREE is unprofitable, and losses have increased over the past 5 years at a rate of -41.5% per year.

Accelerating Growth: Unable to compare CREE's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CREE is unprofitable, making it difficult to compare its past year earnings growth to the Semiconductor industry (-15.8%).


Return on Equity

High ROE: CREE has a negative Return on Equity (-4.69%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cree's financial position?


Financial Position Analysis

Short Term Liabilities: CREE's short term assets ($1.4B) exceed its short term liabilities ($242.7M).

Long Term Liabilities: CREE's short term assets ($1.4B) exceed its long term liabilities ($528.3M).


Debt to Equity History and Analysis

Debt Level: CREE's debt to equity ratio (23.4%) is considered satisfactory.

Reducing Debt: CREE's debt to equity ratio has increased from 1.6% to 23.4% over the past 5 years.


Balance Sheet

Inventory Level: CREE has a high level of physical assets or inventory.

Debt Coverage by Assets: CREE's debt is covered by short term assets (assets are 2.9x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: CREE has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if CREE has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Cree's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate CREE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate CREE's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CREE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CREE's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CREE's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Cree's salary, the management and board of directors tenure and is there insider trading?

1.6yrs

Average management tenure


CEO

Gregg Lowe (56yo)

2.3yrs

Tenure

US$10,448,871

Compensation

Mr. Gregg A. Lowe has been the President and Chief Executive Officer at Cree, Inc. since September 27, 2017. Mr. Lowe served as Chief Executive Officer and President at Freescale Semiconductor, Inc. since  ...


CEO Compensation Analysis

Compensation vs Market: Gregg's total compensation ($USD10.45M) is above average for companies of similar size in the US market ($USD5.09M).

Compensation vs Earnings: Gregg's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.6yrs

Average Tenure

52yo

Average Age

Experienced Management: CREE's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Age and Tenure

4.1yrs

Average Tenure

55yo

Average Age

Experienced Board: CREE's board of directors are considered experienced (4.1 years average tenure).


Insider Trading

Insider Buying: CREE insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$91,73804 Nov 19
Duy-Loan Le
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$45.87
BuyUS$120,14521 May 19
Duy-Loan Le
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$60.07
BuyUS$128,92016 May 19
Duy-Loan Le
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$64.46

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.3%.


Management Team

  • John Palmour (58yo)

    Founder & CTO - Wolfspeed

    • Tenure: 0yrs
    • Compensation: US$1.29m
  • Gregg Lowe (56yo)

    President

    • Tenure: 2.3yrs
    • Compensation: US$10.45m
  • Tyler Gronbach (50yo)

    Vice President of Investor Relations

    • Tenure: 0yrs
  • Brad Kohn (50yo)

    Secretary

    • Tenure: 0yrs
  • Greg Merritt

    Vice President of Marketing & Public Affairs

    • Tenure: 0yrs
  • Thomas Wessel (52yo)

    Senior Vice President of Global Sales and Marketing

    • Tenure: 1.8yrs
  • Claude Demby (55yo)

    Senior VP & GM of LED Products

    • Tenure: 1yrs
  • David Elien

    Senior Vice President of Lighting

    • Tenure: 0yrs
  • Neill Reynolds (44yo)

    Executive VP & CFO

    • Tenure: 1.3yrs
    • Compensation: US$4.56m
  • Rick McFarland

    Senior Vice President of Global Operations

    • Tenure: 0yrs

Board Members

  • Darren Jackson (54yo)

    Independent Chairman of the Board

    • Tenure: 1.2yrs
    • Compensation: US$279.06k
  • Clyde Hosein (60yo)

    Independent Director

    • Tenure: 14yrs
    • Compensation: US$259.06k
  • Tom Werner (59yo)

    Independent Director

    • Tenure: 13.8yrs
    • Compensation: US$256.56k
  • Gregg Lowe (56yo)

    President

    • Tenure: 2.3yrs
    • Compensation: US$10.45m
  • Duy-Loan Le (56yo)

    Independent Director

    • Tenure: 1.2yrs
    • Compensation: US$204.03k
  • John Replogle (53yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$254.06k
  • John Hodge (51yo)

    Independent Director

    • Tenure: 1.2yrs
    • Compensation: US$206.53k
  • Anne Whitaker (52yo)

    Independent Director

    • Tenure: 6yrs
    • Compensation: US$246.56k

Company Information

Cree, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cree, Inc.
  • Ticker: CREE
  • Exchange: NasdaqGS
  • Founded: 1987
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: US$4.666b
  • Shares outstanding: 107.71m
  • Website: https://www.cree.com

Number of Employees


Location

  • Cree, Inc.
  • 4600 Silicon Drive
  • Durham
  • North Carolina
  • 27703
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CREENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDFeb 1993
CR6DB (Deutsche Boerse AG)YesCommon StockDEEURFeb 1993
CR6XTRA (XETRA Trading Platform)YesCommon StockDEEURFeb 1993
0I4QLSE (London Stock Exchange)YesCommon StockGBUSDFeb 1993

Biography

Cree, Inc. provides lighting-class light emitting diode (LED) and semiconductor products for power and radio-frequency (RF) applications in the United States, China, Europe, and internationally. It operate ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 23:35
End of Day Share Price2019/12/09 00:00
Earnings2019/09/29
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.