Cree Reports Q4 Loss; Shares Fall 5.2% After Hours

Cree, Inc. (CREE) reported a better-than-feared fiscal Q4 loss and topped revenue estimates. However, shares of the U.S.-based manufacturer and marketer of semiconductors dropped 5.2% in Tuesday’s extended trading session.

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The company reported an adjusted loss of $0.23 per share, beating analysts’ expectations of a loss of $0.24 per share. The company reported a loss of $0.27 per share in the prior-year period.

Revenues jumped 35% year-over-year to $145.8 million and exceeded consensus estimates of $145.17 million. The increase in revenues reflected a surge in demand driven by customers’ escalated production that came much earlier than prior expectations.

Cree CEO Gregg Lowe commented, “We are on track to bring the world’s largest silicon carbide fab online in early calendar 2022, which uniquely positions us to capitalize on what we believe to be a multi-decade growth opportunity ahead.” (See Cree stock charts on TipRanks)

Looking forward, the company provided guidance for the first quarter of fiscal 2022. Cree forecasts an adjusted loss in the range of $0.21 to $0.25 per share, while the consensus estimate is pegged at a loss of $0.23 per share. Revenues are forecast to be in the range of $144 – $154 million versus the consensus estimate of $153.4 million.

Ahead of the Q4 results, Cowen & Co. analyst Jeff Osborne decreased the price target on Cree from $150 to $115 (33.3% upside potential) and reiterated a Buy rating.

Osborne believes that Cree shares will remain range-bound for the next few months until its upcoming analyst day in mid-November.

Overall, the stock has a Strong Buy consensus rating based on 3 unanimous Buys. The average Cree price target of $123.50 implies 43.2% upside potential from current levels. Shares of Cree have jumped 26% over the past year.