How Much Can The LED Lighting Segment Add To Cree’s Revenues In The Next Five Years?

-22.09%
Downside
80.07
Market
62.38
Trefis
CREE: Cree logo
CREE
Cree

LED Lighting segment, which is the most important segment for Cree (NYSE:CREE), can add about $642 million to the company’s topline over the next five years. At present, the segment accounts for about 58% of Cree’s overall revenues and this figure is expected to touch 59% by 2020, which essentially means that we estimate LED lighting segment’s revenue growth to modestly outpace the growth in other divisions of the company.

The following factors support the fact that LED lights are going to see strong adoption growing ahead, which is likely to help Cree’s LED lighting segment:

  • LED lighting offers significant benefits over traditional bulbs and are becoming a broadly affordable technology. With energy savings of 50%-60% leading to lower greenhouse gas emissions and a much higher lifespan compared to conventional technologies, LEDs offer a cost effective option to lower global electricity consumption.
  • Many economies, especially in emerging markets, are witnessing rapid urbanization, which is leading to greater opportunities for economic and social development. However, thhis also creates resource scarcity and raises environmental concerns. Countries are starting to recognize the opportunity LEDs provide to help them significantly reduce their energy costs and lower maintenance charges.
  • As LED costs are going down at a rate of 30% per annum, it is becoming a broadly affordable technology. Moreover, the payback period for LED lighting installations is coming down, which makes LED lighting a better choice for installation in office buildings and street lighting solutions. Combined with bans on incandescent lighting in various countries, this will result in a higher penetration of the general lighting market.

Revenue_LED_Lighting_Segment

Relevant Articles
  1. 9% Drop In Cree Stock A Buying Opportunity?
  2. Strong Demand Revival Could Help Cree Stock Regain Recent Highs
  3. Cree Stock Seems Overpriced After 2.5X Move
  4. Could Cree Stock Drop To $80?
  5. What’s The Downside On Cree Stock?
  6. Cree Stock To Drop More Than 20%?

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology