Wolfspeed Shares Tank On Heels Of Tesla SiC Cut Down, Analysts Focus On 200mm Delay

Shares of semiconductor maker Wolfspeed Inc WOLF tanked in early trading on Thursday, adding to losses made on news of Tesla Inc’s TSLA silicon-carbide (SiC) cut down. Here are some key analyst takeaways from the company’s fiscal third-quarter earnings call.

• Oppenheimer analyst Colin Rusch downgraded the rating on the stock to Perform.
• Susquehanna analyst Christopher Rolland maintained a Neutral rating, while reducing the price target from $88 to $60.
• William Blair analyst Jed Dorsheimer reiterated an Outperform rating on the stock.

Check out other analyst stock ratings.

Oppenheimer

“With WOLF pushing out the timeline for the Mohawk Valley production ramp, we believe the company is making important progress on validating its process technology while customer engagement remains strong,” Rusch wrote.

“We continue to see WOLF as a leader in SiC, believe it will successfully ramp planned capacity, and that EV designs will retain SiC components,” the analyst said. “However, we believe uncertainty around financing and ramp cadence will remain an overhang for several quarters."

Susquehanna

Although Wolfspeed’s March quarter results were better than expected, its June quarter guidance was disappointing, “as execution issues impacted once again,” Rolland said.

“While the taller boules have helped ramp more product, there appears to be a one-time benefit as the company sold through that extra WIP, creating a tough comp and a bit of an air pocket for June,” the analyst wrote. “200mm material is slower to ramp, in part given a more conservative team here, causing them to move Power Device products back into Durham on 150mm to support customers,” he added.

William Blair

“We believe this reset is finally deep enough for realistic expectations, and we believe this is the last one investors will stomach,” Dorsheimer said.

The delay in 200mm wafer supply is the “lower wafer output per furnace as Wolfspeed climbs the yield and learning curve,” the analyst stated. “We remain confident in the cost advantages of 200mm, and Wolfspeed achieving the only 200mm SiC fab is a “when,” not an "if."

WOLF Price Action: Shares of Wolfspeed had declined by 13.51% to $49.67 at the time of publishing Thursday.