Wolfspeed (WOLF) Losses Worsen 38.7% Per Year, Deep Value Narrative Faces Major Test

Wolfspeed (WOLF) remains unprofitable, with net losses accelerating at a rate of 38.7% per year over the past five years. The company’s net profit margin has not improved in the last year, and there are no signals of profit growth picking up speed. Compared to the sector, the stock trades at a Price-to-Sales ratio of just 0.9x, sharply below the US semiconductor industry average.

See our full analysis for Wolfspeed.

Next, we'll see how the recent results compare with the broader narratives investors and analysts are following for Wolfspeed. This will show where the numbers confirm or defy the story so far.

Curious how numbers become stories that shape markets? Explore Community Narratives

Price-to-Sales Multiple Points to Deep Value

• Wolfspeed is trading at a Price-to-Sales (P/S) ratio of 0.9x, far below the US semiconductor industry average of 5.5x and peer group average of 6.5x. This underlines a significant valuation discount relative to the sector.
• Bulls often argue that such a low P/S multiple strongly supports a deep value case based on sector optimism and the potential for future upside if the business can address its losses.
  • However, the severe discount also reflects concerns about Wolfspeed’s persistent unprofitability and lack of clear signs that margins will rebound soon.

DCF Fair Value Gap Remains Substantial

• The DCF fair value for Wolfspeed is $223.63, which is over eight times the current share price of $26.16. This highlights a striking disconnect between modeled intrinsic value and market sentiment.
• What stands out is that despite this large gap, there is no evidence from the latest filings that either revenue or earnings are expected to accelerate. This leaves the valuation gap unsupported by growth momentum.
  • In this context, value alone may not attract new buyers if financial performance does not stabilize or improve from current loss trends.

Losses Accelerate Despite Sector Tailwinds

• Net losses have worsened at a 38.7% per year pace over the past five years, while net profit margin has remained stagnant, even as the broader semiconductor industry enjoys strong demand in power electronics and EV infrastructure.
• The prevailing market view recognizes Wolfspeed’s position in a high-growth sector but cautions that execution risks, particularly regarding cost controls and production scale, will continue to define investor sentiment without a visible turnaround in results.
  • Even with sector trends supporting long-term optimism, Wolfspeed’s track record of deepening losses keeps near-term skepticism in focus.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Wolfspeed's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Wolfspeed continues to report widening losses and stagnant margins, with little evidence of a near-term return to profitability, even though the sector is growing.

If you’re looking for steadier performance and fewer earnings surprises, check out stable growth stocks screener (2108 results) to discover companies consistently growing revenue and profits year after year.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com