Wolfspeed(US:WOLF) ZACKS·2025-05-15 17:45Core Viewpoint - Wolfspeed (WOLF) has experienced significant stock declines, with a 13.8% drop since its third-quarter fiscal 2025 results and a 42.6% decline year-to-date, underperforming both the Zacks Computer and Technology sector and the Semiconductor – Discretes industry [1] Financial Performance - The company reported fiscal third-quarter revenues of $185 million, a 7.6% year-over-year decline, and fell 0.48% short of the Zacks Consensus Estimate [5] - The revenue drop was primarily due to a slowdown in the Materials segment, which generated $78 million, reflecting weakened demand from material customers [5] - Underutilization costs of $26.3 million linked to the ramp-up phase of the Mohawk Valley Fab have significantly impacted the company's gross margin [6][7] Debt Obligations - Wolfspeed faces substantial debt obligations, including a $575 million payment due next year for convertible bonds, with total debt escalating to $6.5 billion [3] - The company is negotiating a $600 million refinancing package with creditors to restructure liabilities and secure working capital [3] Financial Stability Concerns - Despite holding $1.3 billion in cash and anticipating over $600 million in tax refunds through the CHIPS Act, the company's financial stability remains uncertain [4] - Wolfspeed has issued warnings about its ability to continue as a going concern, citing challenges in refinancing and delays in expected federal funding [4] Earnings Estimates - The Zacks Consensus Estimate for fiscal 2025 revenues is $756.74 million, indicating a 6.25% decrease from the previous year [8] - The consensus estimate for the fiscal 2025 bottom line is a loss of $3.34 per share, a decline from the year-ago quarter's reported loss of $2.59 per share [8] Market Position - Wolfspeed has underperformed its competitors, with shares of SolarEdge Technologies, CommScope, and Himax Technologies gaining 32.9%, 11.2%, and 5.7%, respectively, over the same timeframe [2]