Financial research institute Zacks Equity Research recently picked Cree as Bear of the Day—a label used to define companies that financially have not been performing too well. In July, Cree had topped the financial company’s list as one of the most promising companies. Below is Zacks analysis of the company’s financial situation:

Bear of the Day:

Cree (Nasdaq: CREE-Free Report) has posted two consecutive negative earnings surprises and has seen earnings estimates slide. The stock has a Zacks Rank #5 (Strong Sell) and is today's Bear of the Day.

Just three short months ago, the prospects for CREE were much better. In fact the stock was a Zacks Rank #1 (Strong Buy) and was highlighted as the Bull of the day on July 16.

This was before the company posted two negative earnings surprises. Each miss was US$ 0.02 in dollar terms and approximately -6% below the Zacks Consensus Estimate.

Cree makes lighting-class light emitting diode (LED), lighting, and semiconductor products for power and radio- frequency (RF) applications. Cree was founded in 1987 and is headquartered in Durham, North Carolina.

The company had a lot of earnings momentum heading into the summer. In February of 2012, the Zacks Consensus Estimate for 2013 stood at $1.37 and then bounced higher to $1.50 in March. The consensus kept rising and reached a peak of $1.59 in July. Then came the first of two earnings misses.

August saw the Zacks Consensus Estimate slide from the peak the previous month to $1.44. Two months later, estimates had again slipped to $1.32. That round trip move isn't quite lights out, but prospects have clearly dimmed.