Yahoo Finance Is It Time To Consider Buying Cree, Inc. (NASDAQ:CREE)?
Cree, Inc. (NASDAQ:CREE), which is in the semiconductor business, and is based in United States, received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$51.08 at one point, and dropping to the lows of US$42.57. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Cree's current trading price of US$46.19 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Cree’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Cree
Is Cree still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19.65% above my intrinsic value, which means if you buy Cree today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $38.61, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Cree’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Cree look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Cree’s earnings over the next few years are expected to increase by 59%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in CREE’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on CREE, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cree. You can find everything you need to know about Cree in the latest infographic research report. If you are no longer interested in Cree, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
