WOLF Stock Risk & Deep Value Analysis
Wolfspeed Inc
Technology • Semiconductors
DVR Score
out of 10
What You Need to Know About WOLF Stock
We analyzed Wolfspeed Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran WOLF through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Aggressive. Here's what we found.
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WOLF Risk Analysis & Red Flags
What Could Go Wrong
The biggest risk is that Wolfspeed's massive multi-billion dollar investment in 200mm silicon carbide manufacturing capacity, particularly at Mohawk Valley, fails to achieve targeted production yields and volumes by 2027-2028, or that market adoption is slower than anticipated. This would lead to continued heavy cash burn (Q3 FY2026 operating cash flow was -$84M) and the necessity for further dilutive equity raises beyond the already planned 'up to 24 million shares' offering, severely impacting per-share value.
Risk Matrix
Overall
Aggressive
Financial
High
Market
Low
Competitive
Medium
Execution
High
Regulatory
Low
Red Flags
- ⚠
Forecast to remain unprofitable over the next 3 years [1].
- ⚠
Potential sale of up to 24 million shares, representing substantial dilution (~33% of new share count post-offering) [8].
- ⚠
Q3 FY2026 gross margin of -20.6% indicates deep unprofitability on products sold [3].
- ⚠
Analyst average 12-month price target of $40.00 is significantly below the current price of $57.41, suggesting a cautious institutional outlook [3].
- ⚠
Operating cash flow of -$84 million in Q3 FY2026 highlights ongoing, significant cash burn [3].
Upcoming Risk Events
- 📅
August 19, 2026 Earnings Disappointment: Failure to show material gross margin improvement or a significant increase in cash burn guidance for Q3 FY2026, leading to a potential stock decline of 15-20%.
- 📅
Formal Pricing of Equity Offering (Q3/Q4 2026): Execution and pricing of the 'up to 24 million shares' offering, causing significant near-term share price dilution and potential selling pressure.
- 📅
Persistent Delays in 200mm Fab Ramp (Late 2026/Early 2027): Major setbacks in achieving targeted production volumes or yield rates at Mohawk Valley, prolonging unprofitability and potentially forcing further capital raises.
When to Reconsider
- 🚪
Exit if Q2 FY2026 gross margin (reported Aug 19, 2026) fails to show material improvement from Q3 FY2026's -20.6% (e.g., remains below -15%).
- 🚪
Sell if the company announces further equity offerings exceeding the 24 million shares already flagged, especially without corresponding significant revenue growth or reduced cash burn guidance.
- 🚪
Exit if management pushes back the estimated timing for 200mm fab profitability or full ramp by more than 6 months due to execution issues.
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What Does Wolfspeed Inc (WOLF) Do?
Market Cap
$2.78B
Sector
Technology
Industry
Semiconductors
Employees
3,434
Wolfspeed, Inc., a semiconductor company, focuses on silicon carbide and gallium nitride (GaN) technologies in Europe, Hong Kong, China, rest of Asia Pacific, the United States, and internationally. The company offers silicon carbide and GaN materials, including silicon carbide bare wafers, epitaxial wafers, and GaN epitaxial layers on silicon carbide wafers to manufacture products for RF, power, and other applications. It also provides power devices, such as silicon carbide Schottky diodes, metal oxide semiconductor field effect transistors (MOSFETs), and power modules for customers and distributors to use in applications, including electric vehicles comprising charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications. The company was formerly known as Cree, Inc. and changed its name to Wolfspeed, Inc. in October 2021. Wolfspeed, Inc. was founded in 1987 and is headquartered in Durham, North Carolina.
Visit Wolfspeed Inc WebsiteInvestment Thesis
If Wolfspeed successfully ramps its 200mm Mohawk Valley fab to high yield and utilization by late FY2027, securing multi-year high-volume contracts beyond the GE Aerospace MOU with key automotive and industrial clients, then it will achieve market leadership in a critical, high-growth SiC power semiconductor market, driving annualized revenue to over $3B+ and transitioning to significant profitability, leading to a re-rating of its valuation to 5-7x EV/Sales against a current market cap of ~$2.2B (post-dilution). This is bullish because the market is currently heavily discounting future profitability and the successful execution of its multi-billion dollar capex strategy due to near-term cash burn and dilution concerns.
Is WOLF Stock Undervalued?
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WOLF Price Targets & Strategy
12-Month Target
$85.00
Bull Case
$120.00
Bear Case
$40.00
Valuation Basis
Based on 7x FY2027 estimated revenue (assuming accelerated ramp of 200mm fab capacity), applied to a post-dilution share count of ~72M shares.
Entry Strategy
Dollar-cost average between $50-$60, particularly on dips towards $50.00, acknowledging the near-term dilution concerns. Monitor volume around these levels for support.
Exit Strategy
Take 30% profit at $85.00, 30% at $100.00, and hold the remainder for long-term 10x potential. Stop loss at $45.00.
Portfolio Allocation
7-10% for aggressive risk tolerance, 3-5% for moderate risk tolerance, acknowledging the high-risk, high-reward profile.
Price Targets & Strategy
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Is WOLF Financially Healthy?
Valuation
P/E Ratio
-0.59
Forward P/E
-0.59
EV/EBITDA
-12.59
PEG Ratio
-1.00
Price/Book
0.65
Price/Sales
5.38
Profitability
Gross Margin
-16.20%
Operating Margin
-60.29%
Net Margin
-72.93%
Return on Equity
96.21%
Revenue Growth
-6.41%
EPS
$23.57
Balance Sheet
Current Ratio
0.36
Quick Ratio
0.28
Debt/Equity
7.00
Total Debt
$1.70B
Cash Flow
Operating Cash Flow
-$83.80M
Free Cash Flow
-$122.80M
EBITDA
$273.20M
Other
Beta (Volatility)
6.09
Does WOLF Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Expanding
Moat Sources
4 Identified
The moat is strengthening due to substantial capital investments in leading-edge 200mm SiC manufacturing and a vertically integrated model, creating significant barriers for competitors. This should sustain its competitive advantage for at least 10-15 years, provided execution is strong.
Moat Erosion Risks
- •Competitors developing equivalent 200mm SiC manufacturing capabilities, eroding Wolfspeed's technological lead and cost advantage.
- •Slower-than-expected global adoption of SiC across key end markets (EVs, renewables), leading to underutilization of expensive fab capacity.
- •Execution failures in fab ramp-up (e.g., yield issues), diminishing projected cost advantages and market supply.
WOLF Competitive Moat Analysis
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WOLF Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (High growth potential in SiC balanced by significant financial risks and recent dilution concerns)
Institutional Sentiment
Neutral to Negative (Inconsistent analyst consensus, with some showing a $40 target significantly below current price; however, CSS LLC reported 5.91% beneficial ownership in a Schedule 13G filing [5]).
Insider Activity (Form 4)
No specific Form 4 insider transactions (bought/sold shares, dollar values, names/titles) are included in the provided search results for the last 90 days [10][11]. Institutional beneficial ownership by CSS LLC was reported at 3,036,553 shares (5.91%) [5].
Options Flow
Normal options activity (no specific unusual options activity data provided in the research).
Earnings Intelligence
Next Earnings
2026-08-19
Surprise Probability
Medium
Historical Earnings Pattern
Likely volatile due to early stage growth and high capital expenditure, highly sensitive to 200mm fab ramp progress and cash burn updates.
Key Metrics to Watch
Competitive Position
Top Competitor
Infineon Technologies AG (IFNNY)
Market Share Trend
Gaining (driven by its vertical integration and early leadership in 200mm SiC manufacturing capacity)
Valuation vs Peers
Wolfspeed is currently unprofitable; therefore, traditional P/E comparisons are not applicable. It likely trades at a premium on Price/Sales or EV/Sales multiples due to its leading position and high growth potential in the critical SiC market, albeit with higher financial risk compared to established, profitable peers like Infineon or STMicroelectronics.
Competitive Advantages
- •Vertical integration from SiC materials to power devices, providing supply chain control and cost efficiency.
- •Leading-edge 200mm SiC manufacturing technology and capacity, a significant barrier to entry.
- •Strong intellectual property and R&D expertise in Silicon Carbide technology.
Market Intelligence
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What Could Drive WOLF Stock Higher?
Near-Term (0-6 months)
- •Q2 FY2026 Earnings Report (Aug 19, 2026): Focus on gross margin improvement from Q3 FY2026's -20.6% and a reduction in operating cash burn from -$84M.
- •Mohawk Valley Fab 200mm Production Milestones (Q3/Q4 FY2026): Specific update on achieving targeted yield rates (e.g., >70%) and production volumes (e.g., >10,000 200mm SiC wafers/week).
Medium-Term (6-18 months)
- •Conversion of GE Aerospace MOU into Firm Supply Agreement (H1 2027): Specific terms and multi-year order book from GE Aerospace for high-voltage SiC applications, potentially securing $100M+ in annual revenue.
- •Accelerated Customer Design Wins & Order Backlog Growth (FY2027): Announcement of new multi-year supply agreements with major automotive OEMs or industrial customers, signaling robust demand beyond current commitments.
Long-Term (18+ months)
- •Achievement of SiC Market Leadership (FY2029-2030): Capturing 20%+ global market share in high-voltage SiC power devices, driving annual revenue run-rate exceeding $3B and sustained GAAP profitability.
- •Sustained Positive Free Cash Flow Inflection (FY2028-2029): Demonstrated operational leverage from 200mm fab, leading to consistent positive free cash flow, supporting future growth without significant further dilution.
Catalysts & Growth Drivers
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What's the Bull Case for WOLF?
- ✓
Watch quarterly gross margin – consistent improvement from Q3 FY2026's -20.6% towards positive territory (e.g., reaching 0% by mid-FY2027).
- ✓
Monitor 200mm SiC wafer output/yield metrics announced during earnings calls – consistent progress towards full capacity and high yields.
- ✓
Track news on new customer design wins or long-term supply agreements, particularly for high-volume applications in EV or renewable energy.
Bull Case Analysis
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Competing with WOLF
See how Wolfspeed Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Wolfspeed Inc WOLF | $2.8B | 7.9 | -0.6 | $712.5M | -72.9% | -6.4% | |
Apple Inc AAPL | $4.4T | 1.6 | 36.0 | $391.0B | 27.1% | 12.8% | Compare → |
Alphabet Inc GOOGL | $4.5T | 1.0 | 27.9 | — | 37.9% | 17.4% | Compare → |
Meta Platforms Inc META | $1.6T | 5.8 | 22.6 | $201.0B | 32.8% | 26.2% | Compare → |
Microsoft Corp MSFT | $3.2T | 0.5 | 25.6 | $281.7B | 39.3% | 17.9% | Compare → |
NVIDIA Corp NVDA | $5.3T | 6.2 | 33.1 | $130.5B | 63.0% | 70.7% | Compare → |
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How Wolfspeed Inc Makes Money
Wolfspeed designs, manufactures, and sells silicon carbide (SiC) materials and power semiconductor devices. Its business model focuses on vertically integrated production, from growing SiC crystals (wafers) to fabricating advanced SiC-based power chips used in electric vehicles, renewable energy systems, industrial power supplies, and defense applications. The company is investing heavily in expanding its 200mm SiC manufacturing capacity to meet anticipated surging global demand for more efficient and robust power electronics, aiming to be a market leader in this critical next-generation semiconductor technology.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Wolfspeed Inc (WOLF)?
As of June 22, 2026, Wolfspeed Inc has a DVR Score of 7.9 out of 10, placing it in the "Solid Pick" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Wolfspeed Inc?
Wolfspeed Inc's market capitalization is approximately $2.8B. The company operates in the Technology sector within the Semiconductors industry.
What ticker symbol does Wolfspeed Inc use?
WOLF is the ticker symbol for Wolfspeed Inc. The company trades on the NYQ.
What is the risk level for WOLF stock?
Our analysis rates Wolfspeed Inc's overall risk as Aggressive. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of WOLF?
Wolfspeed Inc currently has a price-to-earnings (P/E) ratio of -0.6. This is below the market average, which could indicate the stock is undervalued or facing headwinds.
Is Wolfspeed Inc's revenue growing?
Wolfspeed Inc has reported revenue growth of -6.4%. Revenue has been declining, which warrants closer examination.
Is WOLF stock profitable?
Wolfspeed Inc has a profit margin of -72.9%. The company is currently unprofitable.
How often is the WOLF DVR analysis updated?
Our AI-powered analysis of Wolfspeed Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on June 22, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for WOLF (Wolfspeed Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.