Wolfspeed(WOLF) ZACKS·2025-03-05 19:01Core Viewpoint - Wolfspeed (WOLF) has underperformed in the market, with a year-to-date decline of 7.2%, compared to the broader Zacks Computer and Technology sector's decline of 5.7% and the Zacks Semiconductor – Discretes industry's fall of 4.7% [1] Financial Performance - The underperformance is attributed to weak financial results in Q2 of fiscal 2025, primarily due to softness in the industrial and energy markets, which limited overall revenue growth [2] - High underutilization costs at manufacturing facilities and lower efficiency during the transition to larger-scale production have contributed to financial strain, resulting in a decline in gross margin and raising investor concerns about profitability [3] Growth Potential - Despite lower revenue levels, Wolfspeed is experiencing strong growth in the electric vehicle (EV) market, with robust demand expected to drive higher revenue contributions in the latter half of fiscal 2025 [4] - The company is nearing completion of a 750 million in direct funding to support the expansion of silicon carbide production, reinforcing its position in domestic supply chains and technological innovation [6] - The silicon carbide market is projected to witness a 9.7% compound annual growth rate (CAGR) from 2024 to 2032, creating significant opportunities for Wolfspeed [7] Q3 Forecast - For Q3 of fiscal 2025, Wolfspeed expects revenues of 200 million, with the Zacks Consensus Estimate at $186.30 million, indicating a 7.17% decrease from the previous year [8] - The non-GAAP loss is estimated to be between 88-76 cents per share, with the consensus mark for the bottom line pegged at a loss of 82 cents per share, widening by 3 cents over the past 60 days [9]