Wolfspeed (WOLF) Up 51.1% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Wolfspeed's recent earnings report showed a non-GAAP loss that missed estimates, with a slight year-over-year revenue decline, raising questions about future performance as the stock has seen a significant increase in value recently [1][2]. Financial Performance - For Q4 fiscal 2025, Wolfspeed reported a non-GAAP loss of 77 cents per share, missing the Zacks Consensus Estimate by 6.94%, compared to a loss of 89 cents per share in the same quarter last year [2]. - Revenues totaled $197 million, a decrease of 1.8% year-over-year, but exceeded the consensus estimate by 4.10% [2]. - The Mohawk Valley Fab contributed $94.1 million in revenues during the quarter [2]. Revenue Breakdown - Power Products accounted for 60.2% of total revenues, with revenues increasing 13.4% year-over-year to $118.6 million [3]. - Materials Products contributed 39.8% of revenues, but saw a decline of 18.4% year-over-year to $78.4 million [3]. Operating Metrics - The company reported a negative non-GAAP gross margin of 1%, down from 5.4% in the previous year, impacted by $23.6 million in underutilization costs [4]. - Sales, general, and administrative expenses were $36.1 million, representing 18.3% of total revenues, down 41.4% year-over-year [4]. - Research and development expenses decreased 37.3% year-over-year to $37.6 million, accounting for 19.1% of total revenues [5]. Balance Sheet and Cash Flow - As of June 29, 2025, Wolfspeed had cash and short-term investments of $955.4 million, down from $1.32 billion as of March 30, 2025 [6]. - Cash used in operating activities was $242.5 million for the quarter, compared to $142.1 million in the previous quarter [6]. - Free cash outflow was $454 million, significantly higher than the previous quarter's $167.7 million [6]. Analyst Sentiment - There have been no earnings estimate revisions from analysts in the past two months, indicating a period of stability in expectations [7]. Investment Scores - Wolfspeed currently has a poor Growth Score of F, a Momentum Score of A, and a Value Score of C, resulting in an aggregate VGM Score of D [8]. Outlook - Wolfspeed holds a Zacks Rank 3 (Hold), suggesting an expectation of an in-line return from the stock in the upcoming months [9].