Wolfspeed (WOLF, Financial) is reportedly gearing up for a Chapter 11 bankruptcy filing as it navigates significant financial challenges. Sources indicate that the company has turned down several out-of-court restructuring proposals from its debt holders. Currently, Wolfspeed is burdened with approximately $6.5 billion in debt. Among these obligations is a substantial $575 million balloon payment scheduled to be paid to convertible noteholders by May 2026. The move towards bankruptcy suggests a strategic decision to address its debt issues more comprehensively.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Wolfspeed Inc (WOLF, Financial) is $4.41 with a high estimate of $12.70 and a low estimate of $2.00. The average target implies an
upside of 40.93%
from the current price of $3.13. More detailed estimate data can be found on the Wolfspeed Inc (WOLF) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Wolfspeed Inc’s (WOLF, Financial) average brokerage recommendation is currently 3.5, indicating “Hold” status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Wolfspeed Inc (WOLF, Financial) in one year is $33.64, suggesting a
upside
of 974.76% from the current price of $3.13. GF Value is GuruFocus’ estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business’ performance. More detailed data can be found on the Wolfspeed Inc (WOLF) Summary page.
WOLF Key Business Developments
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wolfspeed Inc (WOLF, Financial) reported fiscal third-quarter financial performance that met or exceeded the midpoint of their guidance ranges.
- The company achieved a sequential revenue growth of 50% at Mohawk Valley, contributing $78 million in revenue.
- Wolfspeed Inc (WOLF) has established a fully automated 200-millimeter manufacturing footprint, positioning itself for cutting-edge silicon carbide solutions.
- The company received approximately $192 million in cash tax refunds from the Section 48D advanced manufacturing tax credit, boosting liquidity.
- Wolfspeed Inc (WOLF) is actively engaged with customers on sampling 200-millimeter materials and pursuing new contracts for 200-millimeter wafer supply.
Negative Points
- Non-GAAP gross margin was only 2.2%, indicating challenges in achieving higher profitability.
- Adjusted EPS was negative $0.72 per share, reflecting ongoing financial challenges.
- The company is undergoing significant restructuring, including a 30% reduction in the senior leadership team.
- Restructuring charges for fiscal 2025 are projected at $400 million to $450 million, indicating substantial costs associated with restructuring.
- Free cash flow during the quarter was negative $168 million, highlighting cash flow challenges.
