Why Did Wolfspeed Shares Gain 33% Today?

  • Analysts bumped their price targets on Wolfspeed Inc WOLF following its Q1 results.
  • The manufacturer of wide bandgap semiconductors reported Q1 revenue of $156.6 million, up 36% year-on-year, above the consensus of $149.2 million. Non-GAAP EPS loss of $(0.21) beat the consensus loss of $(0.23).
  • Wolfspeed sees Q2 revenue of $165 million - $175 million above the consensus of $157.9 million. It sees a non-GAAP EPS loss of $(0.16) - $(0.20) above the consensus loss of $(0.23).
  • Wells Fargo analyst Gary Mobley raised the PT to $105 from $85, implying a 15.5% upside, following relatively strong Q1 results and above consensus Q2 guidance. 
  • The analyst keeps an Equal Weight rating on the shares.
  • BMO Capital analyst Ambrish Srivastava raised the PT to $90 from $80, implying priced at the current level, but reiterated a Market Perform.
  • The analyst is optimistic about the company's improving visibility, higher exit revenue run rate, and bottoming gross margins, but he also views shares of Wolfspeed as "reasonably valued." 
  • Srivastava still contends that with its market-leading position in wide bandgap semiconductors such as SiC and GaN, the company stands to benefit from markets ranging from EVs to 5G.
  • Price Action: WOLF shares closed higher by 33.20% at $121.04 on Thursday.
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