Wolfspeed (NYSE:WOLF) Shares Gap Down - Here's Why

Key Points

• Wolfspeed shares fell sharply, opening at $27.07 versus the prior close of $28.57 and later trading near $25.92.
• Analyst sentiment remains cautious: the stock has an average “Hold” rating and a $25.00 average price target, with recent target cuts and a “strong sell” downgrade.
• Wolfspeed beat quarterly EPS expectations but reported a 24.1% year-over-year revenue decline to $149.6 million; analysts expect a loss of $8.27 per share for the current fiscal year.

Shares of Wolfspeed, Inc. (NYSE:WOLF - Get Free Report) gapped down before the market opened on Wednesday. The stock had previously closed at $28.57, but opened at $27.07. Wolfspeed shares last traded at $25.9150, with a volume of 472,296 shares traded.

Wall Street Analyst Weigh In

A number of equities research analysts have recently issued reports on the company. Weiss Ratings upgraded Wolfspeed from a "sell (d)" rating to a "sell (d+)" rating in a report on Thursday, October 8th. Susquehanna lowered their target price on Wolfspeed from $40.00 to $30.00 and set a "neutral" rating on the stock in a research note on Tuesday, July 21st. Wall Street Zen lowered Wolfspeed from a "sell" rating to a "strong sell" rating in a research note on Saturday, September 19th. TD Cowen reissued a "hold" rating and set a $25.00 price target on shares of Wolfspeed in a report on Thursday, August 20th. Finally, Zacks Research raised Wolfspeed to a "hold" rating in a report on Friday, September 25th. One investment analyst has rated the stock with a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the company presently has an average rating of "Hold" and an average price target of $25.00.

Wolfspeed Price Performance

The stock's 50-day moving average price is $28.22 and its 200-day moving average price is $35.36. The company has a market cap of $1.32 billion and a P/E ratio of -1.59.

Wolfspeed (NYSE:WOLF - Get Free Report) last released its quarterly earnings results on Wednesday, August 19th. The company reported ($2.26) EPS for the quarter, beating the consensus estimate of ($2.45) by $0.19. The business had revenue of $149.60 million during the quarter, compared to analyst estimates of $150.00 million. During the same quarter last year, the company posted ($0.77) earnings per share. The company's revenue was down 24.1% on a year-over-year basis. As a group, analysts expect that Wolfspeed, Inc. will post -8.27 EPS for the current fiscal year.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently made changes to their positions in WOLF. Renesas Electronics America Inc. acquired a new stake in Wolfspeed during the 2nd quarter worth about $813,126,949. Shah Capital Management grew its position in shares of Wolfspeed by 1,419.5% during the 1st quarter. Shah Capital Management now owns 508,948 shares of the company's stock worth $8,306,000 after buying an additional 475,454 shares during the period. SG Americas Securities LLC bought a new stake in shares of Wolfspeed in the 1st quarter valued at $6,671,000. Ardsley Advisory Partners LP bought a new stake in shares of Wolfspeed in the 4th quarter valued at $2,873,000. Finally, Panview Capital Ltd bought a new stake in shares of Wolfspeed in the 2nd quarter valued at $6,952,000.

About Wolfspeed

Wolfspeed, Inc NYSE: WOLF develops and manufactures semiconductor technologies based primarily on silicon carbide, a wide-bandgap material designed to support efficient power conversion and high-temperature operation. Its products are used in applications where reduced energy loss, higher power density and improved thermal performance are important.

The company's offerings include silicon carbide wafers and materials, power modules, metal-oxide-semiconductor field-effect transistors (MOSFETs), diodes and other power semiconductor devices.

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