Wolfspeed
Shares of the semiconductor developer Wolfspeed (NYSE:WOLF) gained 30% as of 1:46 p.m. Eastern Time on Thursday. This came after the business posted strong earnings results for the fiscal fourth quarter that concluded on June 26.
According to Wolfspeed (NYSE:WOLF), revenue increased to $228 million, up from $145 million in the previous quarter. Earnings per share adjusted for inflation also improved, going from a loss of $0.23 in the same quarter last year to a gain of $0.02 in the most recent quarter.
Following such a successful conclusion to the financial year, management is anticipating a positive long-term outcome for the prognosis it had previously published.
Then what?
Wolfspeed has recently launched a new manufacturing facility for its silicon carbide product, predicted to produce higher demand as it ramps up. In fact, this higher demand is expected to be far more than what management had anticipated.
Wolfspeed (NYSE:WOLF) announced the acquisition of several new customers during the most recent fiscal year, which resulted in a revenue increase of 42% yearly. The optimistic view for demand, the excellent conclusion to the fiscal year 2022, and the growing profitability on the bottom line all contributed to the rise in the stock price.
What Next?
Wolfspeed (NYSE:WOLF) anticipates that the company will bring in sales in the range of $232.5 million to $247.5 million for the first quarter of the fiscal year, with an adjusted net loss ranging between $0.02 and $0.08. The analysts anticipate that the revenue will increase by 39% the following year.
During the call to discuss quarterly earnings, management mentioned that the company is witnessing an increase in demand as the world moves toward more efficient forms of energy. As a consequence of this development, the market opportunity for silicon carbide has increased to $35 billion.
Wolfspeed (NYSE:WOLF) continued success in rapidly expanding areas, such as those for electric vehicles and telecommunications, bodes well for the company’s long-term future. The management team now believes that the actual income for the year 2026 could be between 30 and 40% greater than their original forecast.
Wolfspeed’s (NYSE:WOLF) valuation is the sole thing investors should be worried about. Over the past five years, the share price has increased by 383%, and it currently trades at an expensive 19 times sales. Because of the high valuation, additional gains in the near future may be constrained.
Featured Image: Megapixl © Servickuz
Author Shariq Khan 
