Shares of Wolfspeed Inc (NYSE:WOLF) tanked in pre-market trading on Thursday, after the company reported mixed results for its fiscal fourth quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

• Morgan Stanley analyst Joseph Moore maintained an Equal-Weight rating, while slashing the price target from $54 to $44.
• BMO Capital Markets analyst Ambrish Srivastava reiterated a Market Perform rating and price target of $55.
• Oppenheimer analyst Colin Rusch reaffirmed a Perform rating on the stock.

Check out other analyst ratings.

Morgan Stanley: Wolfspeed reported disappointing gross margins for the quarter, while disclosing that Mohawk Valley drove merely $1 million in revenues and “will take longer than we had modeled for output to reflect 20% utilization,” Moore said in a note.

“Much focus on the call was placed on the decision to include startup costs in non GAAP results going forward, but that's overdue and is happening well past the peak of startup expenses,” he added.

BMO Capital Markets: Although Wolfspeed reported a revenue beat, its earnings came in short of expectations and guidance was lower than the consensus estimates, Srivastava said.

Some of the start-up costs “will now be recognized in COGS/GM and classified as underutilization charges vs. prior expensing in OpEx,” the analyst wrote. “The second major change is that these costs will no longer be removed in the company's pro forma results, thus resulting in lower PF profitability/margins."

Oppenheimer: Wolfspeed reported solid revenues but disappointing margins, with a change in its accounting presentation, Rusch said. The company also “sees ongoing elevated start-up expense while taking a loss on wafer contracts,” he added.

“Given the inherent challenges of SiC production, we expect investors to be skeptical of timing on scale-up and reaching target margins even though customer engagement is high ($1.6B in design-ins during JunQ23) and reiteration of ramp cadence was in line with previous commentary,” the analyst further wrote.

WOLF Price Action: Shares of Wolfspeed had declined by 20.63% to $42.20 a share at last check on Thursday, Aug. 17.

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