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1. Company Snapshot

1.a. Company Description

Wolfspeed, Inc.provides silicon carbide and gallium nitride (GaN) materials, power devices, and radio frequency (RF) devices based on wide bandgap semiconductor materials and silicon.The company's silicon carbide and GaN materials comprise silicon carbide bare wafers, epitaxial wafers, and GaN epitaxial layers on silicon carbide wafers.


It offers silicon carbide materials for customers to manufacture products for RF, power, and other applications.The company's power devices include silicon carbide Schottky diodes, metal oxide semiconductor field effect transistors (MOSFETs), power modules, and gate driver boards for customers and distributors to use in applications, such as electric vehicles comprising charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications.Its RF devices comprise GaN-based die, high-electron mobility transistors, monolithic microwave integrated circuits, and laterally diffused MOSFET power transistors for telecommunications infrastructure, military, and other commercial applications.


The company's products are also used in transportation, fast charging, wireless systems, 5G, motor drives, renewable energy and storage, and aerospace and defense applications; and materials products and RF devices are used in military communications, radar, satellite, and telecommunication applications.It serves customers in North America, Asia, and Europe.The company was formerly known as Cree, Inc.


and changed its name to Wolfspeed, Inc.in October 2021.Wolfspeed, Inc.


was founded in 1987 and is headquartered in Durham, North Carolina.

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1.b. Last Insights on WOLF

Wolfspeed's recent performance has been negatively impacted by persistent operational challenges, including weak EV demand and bankruptcy-related market share losses. Despite a 50% sequential increase in AI data center revenues, the company's sales and Adjusted EBITDA declined to multi-year lows. However, the restructuring has reduced debt obligations and non-GAAP operating expenses substantially. Additionally, Wolfspeed received a $700 million Section 48D cash tax refund, which was used to retire long-term debt. The company also faces a negative gross margin and negative cash flow. Analysts have a consensus rating of "Reduce" on the stock.

1.c. Company Highlights

2. Wolfspeed's Earnings Report: A Mixed Bag with Growth Potential

Wolfspeed reported revenue of $168 million for the second quarter of fiscal 2026, with power revenue accounting for $118 million and materials revenue making up $50 million. The company's EPS came out at -$6.11, significantly worse than the estimated -$0.735. Gross margin remained negative due to fresh start accounting impacts, including a $23 million step-up related to work in progress and finished goods recognized in COGS during the quarter.

Publication Date: Feb -08

📋 Highlights
  • Total Revenue:: Generated $168 million, with $118 million from power and $50 million from materials.
  • Ai Data Center Growth:: Achieved 50% QoQ growth in AI data center revenue.
  • Cash Position:: Maintained $1.3 billion in cash and secured $700 million in 48D tax refunds.
  • Fresh Start Accounting Impact:: $23 million step-up in COGS due to work-in-progress/finished goods adjustments in Q2.
  • Depreciation Reduction:: Anticipates $30 million quarterly net reduction in depreciation/amortization post-restructuring.

Operational Highlights and Progress

Despite the challenging financial performance, Wolfspeed achieved significant operational milestones, including 50% quarter-over-quarter growth in AI data center revenue and the production of a 300-millimeter silicon carbide wafer. The company has also secured key customer wins and is making progress in its strategic focus areas, including automotive, industrial and energy, aerospace and defense, and materials. As Robert Feurle mentioned, the company's vertical integration and US-based manufacturing capabilities are valued by customers, particularly in the context of silicon carbide in traction inverters for 800-volt battery platforms.

Financial Discipline and Capital Structure

Wolfspeed is prioritizing strict financial discipline, aiming to maintain balance sheet strength and stability. The company has a cash position of $1.3 billion and has secured $700 million in 48D cash tax refunds. Additionally, Wolfspeed is exploring refinancing options for its L1s, which could potentially lead to interest savings of $50 million to $100 million annually.

Valuation and Growth Prospects

Analysts estimate revenue growth of 7.9% for next year, indicating a potential turnaround. With a P/S Ratio of 0.55 and an EV/EBITDA of -1.03, the market appears to be pricing in significant challenges. However, the company's progress in AI data centers, industrial and energy applications, and its positioning in the silicon carbide value chain suggest potential for long-term growth. As Wolfspeed continues to execute on its strategic priorities, the market may reevaluate its valuation.

Outlook and Conclusion

Wolfspeed's near-term outlook remains uncertain, particularly in the automotive end market, which is expected to remain volatile. However, the company is encouraged by growing momentum in key strategic areas, and its refreshed leadership team is focused on driving operational excellence and long-term growth. As the company provides an update on its long-range plan in 2026, investors will be watching closely for signs of progress and potential revaluation.

3. NewsRoom

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Wolfspeed Announces Subscriptions for $379 Million of Convertible Notes and $96.9 Million of Common Stock and Pre-Funded Warrants

Mar -19

Source: businesswire.com

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Wolfspeed Appoints Silicon Carbide Industry Veteran Daihui Yu as Regional President, Greater China

Mar -13

Source: businesswire.com

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Wolfspeed Unveils Foundation for Next‑Generation AI Data Center Advanced Packaging Leveraging 300mm Silicon Carbide Technology

Mar -10

Source: businesswire.com

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Wolfspeed Introduces Industry's First Commercially Available 10,000 V Silicon Carbide Power MOSFET

Mar -05

Source: businesswire.com

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This Billionaire Started a Position in Wolfspeed. Should Investors Follow Suit?

Feb -23

Source: fool.com

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Wolfspeed Strengthens Global Sales Leadership with Addition of Semiconductor Leader, Stefan Steyerl, as VP of Sales, EMEA

Feb -17

Source: businesswire.com

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Wolfspeed Accelerates AI-Powered Manufacturing and Operations with Snowflake

Feb -11

Source: businesswire.com

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Should Investors Buy the Dip in Wolfspeed's Stock?

Feb -10

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.23%)

6. Segments

Power Products

Expected Growth: 11.47%

Wolfspeed's Power Products segment growth of 11.47% is driven by increasing adoption of electric vehicles, rising demand for renewable energy systems, and growing need for energy-efficient solutions in industrial and consumer applications, fueled by advancements in silicon carbide technology and expanding customer base.

Materials Products

Expected Growth: 10.88%

Wolfspeed's Materials Products segment growth is driven by increasing adoption of electric vehicles, rising demand for renewable energy, and growing need for energy-efficient solutions. Additionally, the company's strategic partnerships, expanding production capacity, and innovative product offerings are contributing to its 10.88% growth.

Radio-frequency Products

Expected Growth: 11.38%

Wolfspeed's Radio-frequency Products segment growth is driven by increasing demand for 5G infrastructure, rising adoption of electric vehicles, and growing need for advanced semiconductor materials in industrial and aerospace applications, resulting in an 11.38% growth rate.

7. Detailed Products

Silicon Carbide (SiC) Power Devices

Wolfspeed's SiC power devices are designed to provide high power density, high efficiency, and high reliability in a variety of applications.

Gallium Nitride (GaN) Radio Frequency (RF) Devices

Wolfspeed's GaN RF devices offer high power, high efficiency, and high linearity for RF and microwave applications.

Silicon Carbide (SiC) MOSFETs

Wolfspeed's SiC MOSFETs provide high voltage, high current, and low losses for high-power applications.

Gallium Nitride (GaN) Power Devices

Wolfspeed's GaN power devices offer high power density, high efficiency, and high reliability for high-power applications.

Silicon Carbide (SiC) Diodes

Wolfspeed's SiC diodes provide high voltage, high current, and low losses for high-power applications.

Gallium Nitride (GaN) Foundry Services

Wolfspeed's GaN foundry services offer custom GaN device design and manufacturing for high-power applications.

8. Wolfspeed, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Wolfspeed, Inc. has a moderate threat of substitutes due to the presence of alternative technologies and products in the market.

Bargaining Power Of Customers

Wolfspeed, Inc. has a low bargaining power of customers due to the specialized nature of its products and the lack of alternative suppliers.

Bargaining Power Of Suppliers

Wolfspeed, Inc. has a moderate bargaining power of suppliers due to the presence of multiple suppliers in the market, but also due to the specialized nature of its products.

Threat Of New Entrants

Wolfspeed, Inc. has a high threat of new entrants due to the growing demand for electric vehicles and the increasing interest in the electric powertrain market.

Intensity Of Rivalry

Wolfspeed, Inc. operates in a highly competitive market with several established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 72.07%
Debt Cost 3.95%
Equity Weight 27.93%
Equity Cost 12.10%
WACC 6.22%
Leverage 258.02%

11. Quality Control: Wolfspeed, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Wolfspeed

A-Score: 4.2/10

Value: 9.6

Growth: 0.9

Quality: 5.1

Yield: 0.0

Momentum: 9.5

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
SiTime

A-Score: 3.6/10

Value: 6.2

Growth: 2.4

Quality: 3.2

Yield: 0.0

Momentum: 8.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Ambarella

A-Score: 3.5/10

Value: 4.6

Growth: 1.4

Quality: 4.0

Yield: 0.0

Momentum: 8.5

Volatility: 2.7

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Stock-Card
Silicon Labs

A-Score: 3.4/10

Value: 4.6

Growth: 1.9

Quality: 2.8

Yield: 0.0

Momentum: 7.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Allegro MicroSystems

A-Score: 3.1/10

Value: 2.4

Growth: 1.6

Quality: 3.9

Yield: 0.0

Momentum: 7.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Power Integrations

A-Score: 2.7/10

Value: 1.6

Growth: 2.0

Quality: 5.6

Yield: 3.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

16.6$

Current Price

16.6$

Potential

-0.00%

Expected Cash-Flows