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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

Breaking News: Wolfspeed Inc received a $698.6 million cash tax refund from the IRS under Section 48D of the Internal Revenue Code. This refund is part of the company's Advanced Manufacturing Investment Credits and represents a significant step in monetizing approximately $1 billion in accrued credits. The company emerged from Chapter 11 bankruptcy in September and is now better positioned to expand its 200mm fabs with reduced debt. Some analysts recommend buying the stock given its improved financial situation.

1.c. Company Highlights

2. Wolfspeed Delivers Mixed Q3 Results Amid Strategic Transformation

Wolfspeed Incorporated's third-quarter fiscal 2025 earnings call presented a mixed picture, with the company reporting revenue of $185 million, aligning with its guidance. The Mohawk Valley facility contributed $78 million, marking a 50% sequential increase, driven by growing demand in specialized markets. The company also received a $192 million cash tax refund from the Section 48D tax credit, enhancing its liquidity position. However, the non-GAAP gross margin stood at 2.2%, and the adjusted EPS came in at -$0.72, slightly better than the consensus estimate of -$0.97. CFO Neill Reynolds emphasized the importance of this tax refund, stating, "This refund is a significant boost to our cash position, enabling us to further invest in our strategic initiatives."

Publication Date: May -09

📋 Highlights
  • Revenue Growth: Q3 revenue reached $185 million, with Mohawk Valley contributing $78 million, up 50% sequentially.
  • Cash Tax Refund: Received a $192 million cash tax refund from Section 48D tax credit, improving capital structure.
  • Manufacturing Transition: Transitioning to 200-millimeter manufacturing, exiting the 150-millimeter market to accelerate profitability.
  • Financial Position: Non-GAAP gross margin of 2.2%, adjusted EPS of -$0.72, and a strong cash position of $1.3 billion.
  • Restructuring Progress: Restructuring on track with $400-450 million in expected charges and projected annualized cash savings from fiscal 2026.

Operational Progress and Strategic Initiatives

The company highlighted progress in its operations, particularly at the JP facility, where production ramp-up plans are underway in anticipation of improving market conditions. Wolfspeed is transitioning to 200-millimeter manufacturing, exiting the less competitive 150-millimeter market. This strategic shift is expected to enhance profitability and align the company more closely with high-growth markets such as AI, EVs, and aerospace. Chairman Tom Werner underscored the company's focus on innovation and market positioning, noting Wolfspeed's leadership in silicon carbide technology.

Management Transition and Financial Position

Wolfspeed's financial position remains robust, with a cash position of $1.3 billion. The company is undergoing restructuring efforts, with estimated charges of $400-450 million and anticipated annualized cash savings from fiscal 2026. CFO Neill Reynolds announced his upcoming departure, expressing confidence in the company's future under new leadership. The transition is expected to be smooth, with Reynolds committed to ensuring continuity.

Valuation and Market Outlook

From a valuation perspective, Wolfspeed's stock is trading at a P/S ratio of 0.89 and an EV/EBITDA of -9.44, reflecting the market's expectations for future growth despite current losses. The company's strategic focus on core innovation and its position in high-growth markets suggest potential upside. Analysts estimate a 26.5% revenue growth for next year, supported by the company's strategic initiatives and improving market conditions. The slight beat on EPS, coming in at -$0.95 versus estimates of -$0.97, indicates incremental progress in cost management and operational efficiency.

3. NewsRoom

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Wolfspeed: Meme Stock or Turnaround in the Making? Does This $700 Million Refund Change Anything?

Dec -04

Source: fool.com

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Wall Street Momentum Stalled by Tech Sector Rotation

Dec -01

Source: schaeffersresearch.com

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Why Wolfspeed Stock Just Popped

Dec -01

Source: fool.com

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Why Is Wolfspeed Stock Up Today?

Dec -01

Source: feeds.benzinga.com

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Wolfspeed Receives $698.6 Million in Section 48D Cash Tax Refunds from IRS

Dec -01

Source: businesswire.com

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Up 14%, Should You Buy Wolfspeed Stock Right Now?

Dec -01

Source: fool.com

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Miss These Genesis Mission Stocks, and You’ll Regret It for a Decade

Dec -01

Source: investorplace.com

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Why Wolfspeed Stock Soared 10.1% Today

Nov -25

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: 4.3/10

Value: 9.6

Growth: 0.9

Quality: 5.1

Yield: 0.0

Momentum: 10.0

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
SiTime

A-Score: 3.7/10

Value: 6.2

Growth: 2.4

Quality: 3.2

Yield: 0.0

Momentum: 8.5

Volatility: 2.0

1-Year Total Return ->

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Ambarella

A-Score: 3.4/10

Value: 4.2

Growth: 1.6

Quality: 4.2

Yield: 0.0

Momentum: 8.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Silicon Labs

A-Score: 3.4/10

Value: 4.6

Growth: 1.9

Quality: 3.0

Yield: 0.0

Momentum: 6.5

Volatility: 4.3

1-Year Total Return ->

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Allegro MicroSystems

A-Score: 3.2/10

Value: 2.4

Growth: 1.7

Quality: 3.7

Yield: 0.0

Momentum: 7.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Power Integrations

A-Score: 2.8/10

Value: 1.6

Growth: 2.0

Quality: 5.8

Yield: 3.0

Momentum: 1.0

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

22.07$

Current Price

22.07$

Potential

-0.00%

Expected Cash-Flows