Wolfspeed (WOLF): Reassessing Valuation After Recent Share Price Volatility

Wolfspeed (WOLF) shares moved modestly higher in recent trading, gaining around 5% to close at $18.06. This follows a period of pressure in the stock price over the past month, offering investors a chance to reassess current valuations.

See our latest analysis for Wolfspeed.

While Wolfspeed’s stock enjoyed a modest bump today, the share price return for the past month has been sharply negative, with a 30-day share price return of -38.9%. This recent drop follows ongoing volatility and weaker momentum since the start of the year. Investors remain alert for signs of a turnaround as the broader valuation picture evolves.

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With shares down significantly in just a month, investors are left wondering if Wolfspeed's current valuation provides a genuine entry point or if the market has already factored in the company’s growth prospects. Is this the buying opportunity some are waiting for, or are future gains already priced in?

Price-to-Sales of 0.6x: Is it justified?

Wolfspeed’s shares trade with a price-to-sales ratio of just 0.6x, placing the stock at a substantial discount compared to industry peers and the broader sector average. The last close was $18.06, notably below average sector valuations.

The price-to-sales (P/S) ratio measures how much investors are willing to pay for each dollar of revenue. In the technology and semiconductor industry, this multiple often reflects expectations for future growth, profitability, and market share expansion. A low P/S could suggest undervaluation or caution about the company’s future prospects.

In Wolfspeed’s case, this 0.6x ratio is well below both the US Semiconductor industry average of 4.2x and the peer average of 5.1x. Such a steep discount signals that the market is heavily discounting Wolfspeed’s growth and profit outlook compared to competitors. If sentiment or company performance were to improve, there could be significant room for the multiple to re-rate closer to sector norms.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Sales of 0.6x (UNDERVALUED)

However, persistent losses and slower revenue growth could weigh on future returns. This may prevent Wolfspeed’s valuation from rebounding despite the current discount.

Find out about the key risks to this Wolfspeed narrative.

Build Your Own Wolfspeed Narrative

If you see things differently or want to dig deeper into the details yourself, it’s quick and easy to put together your own perspective in just a few minutes. Do it your way

A great starting point for your Wolfspeed research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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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.

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