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While WOLF’s shares have plunged 81.3%, the same for Tokyo Electron and Vishay Intertechnology have declined 7.7% and 24.9%, respectively. The broader sector has appreciated 14.5% over the same timeframe.
The underperformance can be attributed to the increasing competitive pressure, persistent supply chain constraints and weakness in the industrial and energy domain across Asia, particularly China.
Despite these challenges, Wolfspeed is seeing positive momentum from its shift into a pure-play silicon carbide provider, supported by portfolio optimization initiatives, including the sale of its RF business.
Hence, investors should ask this question — is the dip the right time to invest in WOLF stock?
Wolfspeed’s Prospects Bright
WolfSpeed’s prospects are bolstered by its expanding presence and technological advancements in the silicon carbide sector. It expects to be one of the top silicon carbide device suppliers over the next five years thanks to first-movers’ advantage in 200-mm wafer volume production, which is the silicon carbide industry’s most-advanced technology.
The Mohawk Valley fab’s expansion is noteworthy. In fourth-quarter fiscal 2024, the 200-mm fab generated $41 million in revenues, showcasing strong growth. Its improved efficiency and reduced costs are boosting profits. The company expects the fab to generate $20-$30 million in revenues in first-quarter fiscal 2025.
Strong design-ins bode well for Wolfspeed with a robust automotive end-market. The company achieved an additional $2 billion in design-ins during fourth-quarter fiscal 2024, bringing the fiscal year total to more than $9 billion. This includes $500 million of design-ins converting to design-wins, indicating a solid pipeline of future revenues.
Wolfspeed’s expanding network of partnerships, including collaborations with EPC Power and Infineon Technologies (IFNNY - Free Report) , has also been a major growth driver.
Wolfspeed recently introduced a silicon carbide module designed to enhance efficiency and scalability in renewable energy and energy storage, partnering with EPC Power to advance utility-grade solar and storage systems.
Its expanding partnership with Infineon enhances supply chain stability and supports the growing demand for silicon carbide solutions in automotive, solar and energy storage applications.
WOLF Q1 Guidance Not so Rosy
Despite a robust portfolio and a growing customer base, Wolfspeed is facing challenges with factory start-up and underutilization costs, which are expected to impact the company’s top line.
For first-quarter fiscal 2025, Wolfspeed expects revenues in the range of $185-$215 million. Non-GAAP loss is expected to be between 90 cents and $1.09 per share.
The Zacks Consensus Estimate for first-quarter fiscal 2025 revenues is currently pegged at $200.06 million, suggesting 1.35% growth over the figure reported in the year-ago quarter.
The consensus mark for earnings is currently pegged at a loss of 95 cents, increasing 15.85% in the past 30 days and suggesting a year-over-year decline of 79.25%.
Zacks Rank & Valuation
Wolfspeed stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
The forward 12-month Price/Sales ratio for WOLF stands at 1.28X, higher than its Zacks Semiconductor - Discretes sector’s 0.84X, reflecting a stretched valuation.
WOLF currently carries Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock.
Image: Bigstock
WOLF Plunges 81.3% YTD: Should You Buy, Hold or Sell the Stock?
Wolfspeed (WOLF - Free Report) shares have underperformed the Zacks Computer & Technology sector and its Zacks Semiconductor - Discretes industry peers Tokyo Electron (TOELY - Free Report) and Vishay Intertechnology (VSH - Free Report) on a year-to-date (YTD) basis.
While WOLF’s shares have plunged 81.3%, the same for Tokyo Electron and Vishay Intertechnology have declined 7.7% and 24.9%, respectively. The broader sector has appreciated 14.5% over the same timeframe.
The underperformance can be attributed to the increasing competitive pressure, persistent supply chain constraints and weakness in the industrial and energy domain across Asia, particularly China.
Despite these challenges, Wolfspeed is seeing positive momentum from its shift into a pure-play silicon carbide provider, supported by portfolio optimization initiatives, including the sale of its RF business.
Wolfspeed Price and Consensus
Wolfspeed price-consensus-chart | Wolfspeed Quote
Hence, investors should ask this question — is the dip the right time to invest in WOLF stock?
Wolfspeed’s Prospects Bright
WolfSpeed’s prospects are bolstered by its expanding presence and technological advancements in the silicon carbide sector. It expects to be one of the top silicon carbide device suppliers over the next five years thanks to first-movers’ advantage in 200-mm wafer volume production, which is the silicon carbide industry’s most-advanced technology.
The Mohawk Valley fab’s expansion is noteworthy. In fourth-quarter fiscal 2024, the 200-mm fab generated $41 million in revenues, showcasing strong growth. Its improved efficiency and reduced costs are boosting profits. The company expects the fab to generate $20-$30 million in revenues in first-quarter fiscal 2025.
Strong design-ins bode well for Wolfspeed with a robust automotive end-market. The company achieved an additional $2 billion in design-ins during fourth-quarter fiscal 2024, bringing the fiscal year total to more than $9 billion. This includes $500 million of design-ins converting to design-wins, indicating a solid pipeline of future revenues.
Wolfspeed’s expanding network of partnerships, including collaborations with EPC Power and Infineon Technologies (IFNNY - Free Report) , has also been a major growth driver.
Wolfspeed recently introduced a silicon carbide module designed to enhance efficiency and scalability in renewable energy and energy storage, partnering with EPC Power to advance utility-grade solar and storage systems.
Its expanding partnership with Infineon enhances supply chain stability and supports the growing demand for silicon carbide solutions in automotive, solar and energy storage applications.
WOLF Q1 Guidance Not so Rosy
Despite a robust portfolio and a growing customer base, Wolfspeed is facing challenges with factory start-up and underutilization costs, which are expected to impact the company’s top line.
For first-quarter fiscal 2025, Wolfspeed expects revenues in the range of $185-$215 million. Non-GAAP loss is expected to be between 90 cents and $1.09 per share.
The Zacks Consensus Estimate for first-quarter fiscal 2025 revenues is currently pegged at $200.06 million, suggesting 1.35% growth over the figure reported in the year-ago quarter.
The consensus mark for earnings is currently pegged at a loss of 95 cents, increasing 15.85% in the past 30 days and suggesting a year-over-year decline of 79.25%.
Zacks Rank & Valuation
Wolfspeed stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
The forward 12-month Price/Sales ratio for WOLF stands at 1.28X, higher than its Zacks Semiconductor - Discretes sector’s 0.84X, reflecting a stretched valuation.
WOLF currently carries Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.