Wolfspeed: Lower Growth Already Priced In

Summary

• Wolfspeed's revenue growth has slowed down, with a YoY decline of 18.2% in Q1 FY2023, attributed to the sale of its RF business and sluggish telecom demand.
• The company's focus on SiC power devices and wafer market remains positive, with higher growth forecasts compared to RF power semiconductors.
• Despite losing ground in the SiC power market, Wolfspeed's SiC materials segment shows potential growth with new supply agreements, but competition from top competitors may impact its growth trajectory.
• We believe the lower growth has been more than priced in with its stock price dropping more than 40% last year, which now presents an excellent buying opportunity.

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In our previous analysis, we anticipated Wolfspeed, Inc.'s (NYSE:WOLF) revenues to sustain a CAGR of approximately 45% due to the company's focus on expanding manufacturing facilities for SiC materials and wafers. However, considering projected supply growth surpassing demand, despite state and US

Analyst’s Disclosure:I/we have a beneficial long position in the shares of WOLF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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