Wolfspeed Inc (WOLF)

Wolfspeed Inc (WOLF) stock fell by 13.61% due to the release of its second-quarter fiscal 2024 results. While the company reported a narrower non-GAAP loss of 55 cents per share compared to the previous year, with revenues reaching $208.4 million, beating expectations, challenges in gross margins, increased operating expenses, and substantial underutilization costs impacted investor sentiment.

• Financial Performance Highlights: Wolfspeed's revenues grew by 20% year over year, surpassing consensus estimates by 1.19%. Power Products accounted for 51.7% of revenues, with Materials Products contributing 48.3%. However, the non-GAAP gross margin declined significantly to 16.4% from 35.8% in the prior year.
• Operational Challenges: The company reported increased operating expenses, including sales, general, and administrative expenses of $64.9 million and research and development expenses of $45.3 million. Wolfspeed also incurred $10.5 million in factory start-up costs and $35.6 million in underutilization costs during the quarter.
• Balance Sheet and Cash Flow: Wolfspeed's cash, cash equivalents, and short-term investments decreased to $2.64 billion from $3.35 billion. The company reported a free cash outflow of $755 million, driven by both operating and capital expenditure costs.
• Guidance for Q3 Fiscal 2024: For the third quarter of fiscal 2024, Wolfspeed anticipates revenues in the range of $185 million to $215 million, with a non-GAAP loss expected to be between 57 cents and 69 cents per share. The company expects materials revenues of $90 million to $95 million and foresees Mohawk Valley Fab contributing $20 million to $30 million in revenues. The non-GAAP gross margin is estimated to be in the range of 13% to 20%, with an anticipated non-GAAP operating expense of approximately $109 million, including start-up costs related to the JP materials facility in Siler City, NC.

Wolfspeed Inc (WOLF) dropped by 5.49% from $33.15 to $31.33 in the trading on Monday October 9, 2023. The reasons why stock WOLF down today includes:

• Lower price target: Evercore ISI lowered the firm’s price target on Wolfspeed to $45 from $80 and keeps an Outperform rating on the shares.
• Investment of buildout in North Carolina: Wolfspeed's investment of facility in North Carolina is tremendously expensive, costs have exceeded Wolfspeed's legacy chip revenues, which has resulted in large losses that reached $330 million last quarter.

Wolfspeed (WOLF) shares fell more than 9% amid wider losses in the broader semiconductor industry and heavier-than-normal volume. Some of the increase in volume on Thursday may be attributed to broader weakness in the equity market, as investors fretted about the latest moves by the Federal Reserve.

https://seekingalpha.com/news/4014343-why-did-wolfspeed-stock-go-down-today-heavy-volume

Wolfspeed, Inc. (WOLF) stocks fell 17.06% to $44.10 after the company reported mixed fourth-quarter financial results and issued first-quarter adjusted EPS guidance below estimates.

https://www.fool.com/investing/2023/08/17/investors-are-worried-about-these-2-falling-stocks/