Wolfspeed (NYSE:WOLF) Shares Gap Up – Here’s What Happened

Wolfspeed, Inc. (NYSE:WOLF)’s stock price gapped up prior to trading on Thursday. The stock had previously closed at $31.37, but opened at $35.02. Wolfspeed shares last traded at $32.5740, with a volume of 7,024,978 shares trading hands.

Key Stories Impacting Wolfspeed

Here are the key news stories impacting Wolfspeed this week:

• Positive Sentiment: Wolfspeed received a conditional commitment for up to $1.5 billion in 30-year financing from the U.S. Department of War’s Office of Strategic Capital. The funds are intended to expand U.S. production of silicon-carbide materials and wide-bandgap power devices, including applications tied to national security. Reuters article
• Positive Sentiment: The long-term financing could provide Wolfspeed with additional liquidity for capital-intensive manufacturing projects, strengthen its balance-sheet flexibility and support the development of a domestic wide-bandgap semiconductor supply chain. The announcement triggered heavy buying and a sharp rise in the stock during extended and regular trading. Wolfspeed financing announcement
• Positive Sentiment: Investor interest was strong enough for Wolfspeed to outperform larger power-chip companies and the broader semiconductor group, as market participants focused on the potential government backing and strategic importance of its technology. 247WallSt article
• Neutral Sentiment: The commitment is conditional, so the financing is not yet equivalent to cash in hand. Investors will likely monitor the final terms, eligibility requirements, project execution and the effect of additional long-term debt on Wolfspeed’s finances. MarketWatch article
• Negative Sentiment: Before the financing announcement, Wolfspeed faced continuing operating pressure: a wafer launch was associated with losses, while its latest reported revenue declined year over year and the company remained unprofitable. Those fundamentals remain important risks even with government support. Ad-hoc-News article

Analyst Upgrades and Downgrades

Several brokerages recently issued reports on WOLF. Weiss Ratings raised shares of Wolfspeed from a “sell (d-)” rating to a “sell (d)” rating in a research note on Monday, August 24th. Zacks Research upgraded shares of Wolfspeed to a “hold” rating in a report on Friday, September 25th. TD Cowen reissued a “hold” rating and set a $25.00 price objective on shares of Wolfspeed in a research report on Thursday, August 20th. Wall Street Zen lowered Wolfspeed from a “sell” rating to a “strong sell” rating in a research report on Saturday, September 19th. Finally, Susquehanna dropped their price target on Wolfspeed from $40.00 to $30.00 and set a “neutral” rating on the stock in a research note on Tuesday, July 21st. One research analyst has rated the stock with a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the company has an average rating of “Hold” and a consensus price target of $25.00.

Wolfspeed Price Performance

The stock has a market cap of $1.68 billion and a price-to-earnings ratio of -2.00. The company’s fifty day simple moving average is $27.83 and its two-hundred day simple moving average is $35.01.

Wolfspeed (NYSE:WOLF) last issued its quarterly earnings data on Wednesday, August 19th. The company reported ($2.26) earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of ($2.45) by $0.19. The business had revenue of $149.60 million for the quarter, compared to analyst estimates of $150.00 million. The firm’s quarterly revenue was down 24.1% compared to the same quarter last year. During the same quarter in the prior year, the business earned ($0.77) earnings per share. On average, analysts forecast that Wolfspeed, Inc. will post -8.27 earnings per share for the current year.

Institutional Trading of Wolfspeed

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Renesas Electronics America Inc. bought a new stake in Wolfspeed in the 2nd quarter worth about $813,126,949. Shah Capital Management grew its holdings in shares of Wolfspeed by 1,419.5% in the first quarter. Shah Capital Management now owns 508,948 shares of the company’s stock valued at $8,306,000 after acquiring an additional 475,454 shares in the last quarter. SG Americas Securities LLC bought a new position in shares of Wolfspeed in the first quarter valued at approximately $6,671,000. Ardsley Advisory Partners LP purchased a new stake in shares of Wolfspeed during the fourth quarter valued at approximately $2,873,000. Finally, Panview Capital Ltd purchased a new position in Wolfspeed in the second quarter worth $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.