U.S. stocks lower as investors rotate out of tech ahead of Jackson Hole
In a turbulent market environment, shares of Wolfspeed, Inc. (NYSE:WOLF) have touched a 52-week low, dipping to $3.3. With a current market capitalization of $837 million, the stock has fallen nearly 82% over the past year. According to InvestingPro analysis, the company appears undervalued at current levels. The semiconductor company, known for its silicon carbide and gallium nitride materials used in various high-growth industries, has faced significant headwinds over the past year. Investors have watched the stock decline sharply, with Cree Inc. , Wolfspeed’s parent company, reporting a staggering 1-year change of -81.76%. InvestingPro data reveals 11 analysts have revised their earnings upwards for the upcoming period, with analyst price targets ranging from $5 to $20. Get access to 12 more exclusive ProTips and comprehensive analysis with an InvestingPro subscription. This downturn reflects broader market trends and specific challenges within the semiconductor sector, as companies navigate supply chain disruptions and shifting demand patterns. The 52-week low marks a critical juncture for Wolfspeed, as stakeholders consider the company’s strategic moves to rebound from recent lows. The company maintains a current ratio of 3.15, indicating strong liquidity to meet short-term obligations, though InvestingPro’s Financial Health Score suggests overall weak fundamentals.
In other recent news, Wolfspeed reported a decline in sales for the December quarter, with revenues reaching $180.5 million, which is a 13% year-over-year drop but aligned with analysts’ expectations. The company’s loss per share was $0.95, which was better than anticipated by analysts. In response to ongoing demand challenges, Wolfspeed has announced a significant reduction in its workforce, cutting approximately 180 jobs to streamline operations and reduce costs. This restructuring includes a one-time charge related to a litigation settlement in the third quarter of FY2025.
Wolfspeed has also achieved a milestone by receiving a conditional Certificate of Occupancy for its Siler City Materials Facility, which is expected to enhance production capabilities. Analyst firms have adjusted their price targets for Wolfspeed, with Citi reducing its target to $7 and maintaining a Neutral rating, while Canaccord Genuity lowered its target to $10 but kept a Buy rating. JPMorgan also revised its price target to $8 and maintained a Neutral rating, citing ongoing demand challenges.
Goldman Sachs reduced its price target for Wolfspeed to $15 but maintained a Buy rating, noting the company’s significant design-win portfolio valued at over $12 billion. Analysts have expressed concerns over Wolfspeed’s liquidity and operational efficiency, with some noting the potential impact of CHIPS Act funding. These developments reflect Wolfspeed’s strategic efforts to navigate current market challenges and position itself for future growth.
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