Wolfspeed earnings move refocuses attention on cash flow and growth markets

Wolfspeed (WOLF) has put fresh numbers on the table with its fourth quarter and full year 2026 results, giving you new data on revenue mix, profitability and balance sheet flexibility.

For the quarter ended June 28, 2026, Wolfspeed reported sales of US$149.6 million, compared with US$197 million a year earlier. The company reported a net loss of US$145.4 million, compared with a net loss of US$669.3 million in the prior year period.

Basic and diluted loss per share from continuing operations came in at US$2.81, compared with US$4.30 a year ago. Management also highlighted adjusted figures, with an adjusted loss of US$2.26 per share and revenue that was at the midpoint of guidance.

For the full fiscal year, Wolfspeed reported sales of US$665.1 million, compared with US$757.6 million a year earlier. Net income was US$4.4 million for the year, compared with a net loss of US$1,609.2 million in the prior year, reflecting a sharp swing in reported profitability.

Within the quarter, Wolfspeed indicated that power revenue was about US$106 million, with growth in artificial intelligence data center applications helping to offset softer automotive demand. Management also pointed to a 70 basis point sequential improvement in gross margin, although non GAAP gross margin guidance for the next quarter remains in negative territory.

The market reaction to these results was quick. Shares of Wolfspeed fell about 11% in after hours trading after the earnings release, as investors weighed the revenue decline, wider than expected adjusted loss per share and guidance that called for broadly flat sales between US$140 million and US$160 million in the coming quarter.

At the same time, Wolfspeed reported that AI data center revenue more than doubled year over year and grew about 20% sequentially. The company also announced its Gen 5 silicon carbide MOSFET technology and secured new automotive business, including a first time award from a European Tier 1 supplier, which some investors may see as relevant for assessing long term demand for its silicon carbide platform.

Wolfspeed ended the quarter with US$1.1b in cash and reduced debt through convertible note conversions. For investors, these balance sheet details matter because they speak to the company’s capacity to fund ongoing investment in silicon carbide materials and devices while it works to improve margins.

Wolfspeed’s 1 day share price return declined 7.53% after the earnings release and the 90 day share price return is down 58.14%, although the year to date share price return remains up 53.67%. Recent momentum has clearly faded from earlier gains.

If you are assessing Wolfspeed alongside other beneficiaries of AI infrastructure, it can be useful to compare its profile with companies in our screener of 56 AI infrastructure stocks

After Wolfspeed’s sharp pullback and a 90 day return that has fallen 58.14%, some investors will see a beaten up entry point, while others may want clearer progress on margins and growth. How does the current valuation compare with that trade off?

Preferred Price-to-Sales multiple for Wolfspeed: Is it justified?

Wolfspeed closed at $29.09, which translates to a P/S ratio of 2.1x that sits well below several peer and industry references but above its own estimated fair level.

The P/S ratio compares the company’s market value to its revenue. For Wolfspeed, which is currently unprofitable and forecast to remain so over the next 3 years, revenue based measures often carry more weight than earnings based metrics that are distorted by losses.

On one hand, Wolfspeed’s P/S of 2.1x is described as good value against a peer average of 9.8x and the US Semiconductor industry average of 6.8x. On the other hand, the same P/S is described as expensive relative to an estimated fair P/S of 1x, which points to a level that the market could potentially move towards if sentiment or growth expectations cool.

Result: Price-to-Sales of 2.1x (ABOUT RIGHT)

However, Wolfspeed is still loss making and carries a relatively low value score of 2, which could weigh on sentiment if revenue momentum stalls.

Next Steps

Given the mixed tone around Wolfspeed’s recent results and valuation, it makes sense to review the underlying data yourself and move quickly if your view differs from the crowd. To understand the specific issues investors are watching, take a close look at the 3 important warning signs.

Looking for more investment ideas beyond Wolfspeed?

If Wolfspeed has sharpened your focus, do not stop there. Broaden your watchlist now so you are not looking back wishing you had acted earlier.

• Spot potential value early by checking stocks that appear mispriced on quality and fundamentals through the 52 high quality undervalued stocks.
• Strengthen your capital base by focusing on companies with resilient finances using the solid balance sheet and fundamentals stocks screener (50 results).
• Hunt for underfollowed opportunities that the market may be overlooking via the screener containing 20 high quality undiscovered gems.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.