Wolfspeed Reports Surprising Earnings, Beats Expectations by $10M
April 27, 2023
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Recently, Wolfspeed ($NYSE:WOLF) reported surprising earnings that beat expectations by $10M. Wolfspeed is a leading provider of power, radio frequency, and microwave semiconductor products for high-performance applications. Their Non-GAAP EPS of -$0.13 surpassed the expected figure of -$0.15 by $0.02, while revenue of $228.7M exceeded the anticipated amount of $220.08M by $8.62M.
This impressive performance was largely attributed to the strong demand for Wolfspeed’s products across a wide range of industries, including aerospace, automotive, and defense. With these initiatives, Wolfspeed seeks to extend its reach and strengthen its market position even further.
Stock Price
On Wednesday, WOLFSPEED released its financial report, which came as a surprise to many analysts. The report showed that the company had outdone expectations, reporting earnings of $10M more than anticipated. Consequently, their stock opened at $57.1 and closed at $57.4, a 1.9% increase from its previous closing price of 56.3. This surge in price no doubt came as a relief to investors in WOLFSPEED, who had watched the company’s stock price dip over the course of the week. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Wolfspeed. More…
| Total Revenues | Net Income | Net Margin |
| 873.9 | -151.2 | -21.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Wolfspeed. More…
| Operations | Investing | Financing |
| -138.9 | -1.03k | 2.07k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Wolfspeed. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 5.34k | 3.56k | 14.31 |
Key Ratios Snapshot
Some of the financial key ratios for Wolfspeed are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -4.6% | -59.9% | -25.0% |
| FCF Margin | ROE | ROA |
| -71.6% | -7.0% | -2.6% |
Analysis
GoodWhale has conducted an analysis of WOLFSPEED‘s financials and based on our Star Chart, WOLFSPEED has an intermediate health score of 6/10 with regard to its cashflows and debt. This score indicates that the company might be able to pay off debt and fund future operations. Upon further inspection, we found that WOLFSPEED is strong in asset, but weak in dividend, growth, and profitability. We have classified WOLFSPEED as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. Given this information, investors who prioritize stability, such as value investors or income investors, may be interested in WOLFSPEED. For these investors, WOLFSPEED’s strong asset base and steady growth could be attractive. On the other hand, investors looking for higher growth or higher returns may not be as interested as WOLFSPEED is not exhibiting high levels of profitability or dividend growth. More…
Peers
The company’s products are used in a variety of applications, including cell phones, wireless infrastructure, and military and aerospace. Wolfspeed‘s main competitors are Nova Ltd, Cirrus Logic Inc, and CML Microsystems PLC.
– Nova Ltd ($NASDAQ:NVMI)
Nova Ltd is a large company with a market cap of 2.09B. It has a strong ROE of 25.44%. The company operates in the oil and gas industry and is a leading provider of exploration and production services.
– Cirrus Logic Inc ($NASDAQ:CRUS)
Cirrus Logic, Inc. is a fabless semiconductor company that specializes in digital signal processing and analog mixed-signal chips. It has a market cap of $3.79B and a ROE of 21.86%. The company’s products are used in a wide range of electronic devices, including smartphones, tablets, digital cameras, MP3 players, automotive entertainment systems, and industrial applications. Cirrus Logic’s products are based on a proprietary mixed-signal processing technology and are designed to meet the demands of high-performance applications.
– CML Microsystems PLC ($LSE:CML)
CML Microsystems PLC is a market leader in the design, development and manufacture of high performance analog and mixed-signal semiconductors. The company has a strong focus on delivering innovative solutions to the wireless communications, automotive, industrial and medical markets. CML Microsystems has a long history of profitability and has a strong balance sheet with no debt. The company’s shares are listed on the London Stock Exchange.
Summary
Wolfspeed, a semiconductor company focused on the development and production of silicon carbide and gallium nitride, recently reported its non-GAAP earnings per share of -$0.13, which beat analysts’ estimates of -$0.15. The company also reported a revenue of $228.7M, surpassing the estimated figure of $220.08M. Despite a decline in the company’s revenue year-over-year compared to the same period last year, investors were generally positive about the results, as Wolfspeed outpaced analyst expectations. Looking ahead, Wolfspeed is well-positioned to capitalize on the growth in the semiconductor industry and continues to remain optimistic about its future prospects.
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