Wolfspeed (WOLF): Taking a Fresh Look at Valuation After Recent Share Price Swing

Wolfspeed (WOLF) shares have slid, closing at $31.10 after a day of declines. The U.S.-based chipmaker has seen ups and downs recently, prompting investors to look closer at both growth potential and ongoing challenges.

See our latest analysis for Wolfspeed.

Wolfspeed’s share price return tells a story of volatility, with a sharp drop of 12.2% in the last day and a 40.7% gain year-to-date, highlighting strong momentum over the longer term. Recent swings reflect shifting sentiment as investors weigh growth opportunities against short-term risks.

If Wolfspeed’s recent moves have you scanning for more potential, it’s a good opportunity to explore See the full list for free.

With steady revenue growth but ongoing losses, Wolfspeed’s numbers paint a mixed picture. Is the recent pullback signaling an undervalued opportunity, or is the market already factoring in the company’s future prospects?

Price-to-Sales Ratio of 1.1x: Is it justified?

Wolfspeed is trading at a price-to-sales ratio of 1.1x, which stands out as low compared to its peers and the broader US semiconductor industry. With a last close price of $31.10, the stock appears attractively priced on this metric.

The price-to-sales ratio captures how much investors are paying for every dollar of Wolfspeed’s sales. For a semiconductor business that is still building scale and not yet profitable, this figure provides insight into what the market expects in terms of future revenue generation rather than near-term earnings.

At 1.1x sales, Wolfspeed’s valuation is markedly below both the peer average of 3.1x and the US industry average of 4.5x. This significant discount suggests the market is either overlooking potential growth or factoring in ongoing losses and uncertainty around future profitability.

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

Result: Price-to-Sales Ratio of 1.1x (UNDERVALUED)

However, ongoing annual net losses and questions over profitability could dampen optimism and challenge the case for continued valuation growth.

Find out about the key risks to this Wolfspeed narrative.

Another View: SWS DCF Model Points to Bigger Upside

Taking a different angle, our DCF model estimates Wolfspeed’s fair value at $319.91, far above where shares trade today. This deep discount—over 90% below fair value—suggests the market may be missing long-term upside or that significant risks are weighing down the price. Which side has it right?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Wolfspeed for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Wolfspeed Narrative

If you think there’s more to the story or want to shape your own perspective, it only takes a few minutes to dive in and create your version: Do it your way

A great starting point for your Wolfspeed research is our analysis highlighting 2 key rewards and 5 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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