As of May 23, 2025, Cree Inc has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $79.12, this represents a potential upside of -300.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $0.00 |
| Potential Upside (5-year) | -302.3% |
| Potential Upside (10-year) | -300.9% |
| Discount Rate (WACC) | 7.2% - 9.8% |
Revenue is projected to grow from $526 million in 06-2021 to $2713 million by 06-2031, representing a compound annual growth rate of approximately 17.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 06-2021 | 526 | 42% |
| 06-2022 | 693 | 32% |
| 06-2023 | 1064 | 54% |
| 06-2024 | 1568 | 47% |
| 06-2025 | 1701 | 8% |
| 06-2026 | 1867 | 10% |
| 06-2027 | 2047 | 10% |
| 06-2028 | 2190 | 7% |
| 06-2029 | 2370 | 8% |
| 06-2030 | 2536 | 7% |
| 06-2031 | 2713 | 7% |
Net profit margin is expected to improve from -65% in 06-2021 to -43% by 06-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 06-2021 | (341) | -65% |
| 06-2022 | (396) | -57% |
| 06-2023 | (575) | -54% |
| 06-2024 | (802) | -51% |
| 06-2025 | (824) | -48% |
| 06-2026 | (856) | -46% |
| 06-2027 | (928) | -45% |
| 06-2028 | (982) | -45% |
| 06-2029 | (1,051) | -44% |
| 06-2030 | (1,113) | -44% |
| 06-2031 | (1,178) | -43% |
with a 5-year average of $254 million. Projected CapEx is expected to maintain at approximately 36% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 06-2022 | 283 |
| 06-2023 | 320 |
| 06-2024 | 402 |
| 06-2025 | 475 |
| 06-2026 | 493 |
| 06-2027 | 590 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 46 |
| Days Inventory | 112 |
| Days Payables | 31 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2022 | (108) | (29) | 248 | (30) | (297) |
| 2023 | (246) | (42) | 380 | 85 | (669) |
| 2024 | (384) | (59) | 561 | 192 | (1,078) |
| 2025 | (328) | (60) | 608 | (20) | (855) |
| 2026 | (335) | (63) | 667 | 38 | (978) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -302.3% |
| 10-Year DCF (Growth) | 0.00 | -300.9% |
| 5-Year DCF (EBITDA) | 0.00 | -100.0% |
| 10-Year DCF (EBITDA) | 0.00 | -100.0% |
Is Cree Inc (CREE) a buy or a sell? Cree Inc is definitely a sell. Based on our DCF analysis, Cree Inc (CREE) appears to be overvalued with upside potential of -300.9%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $79.12.