Wolfspeed (WOLF) Q3 Loss Narrows, Revenues Increase Y/Y
Wolfspeed WOLF reported a third-quarter fiscal 2023 non-GAAP loss of 13 cents per share, narrower than the Zacks Consensus Estimate of a loss of 15 cents per share but wider than the year-ago quarter’s loss of 12 cents per share.
Revenues of $228.7 million increased 21.6% year over year and beat the consensus mark by 4.65%.
Quarter Details
In the fiscal third quarter, Wolfspeed reported a non-GAAP gross margin of 30%, which contracted 400 basis points on a year-over-year basis. Gross margin was adversely impacted by supply chain constraints.
In the reported quarter, sales, general and administrative expenses were $60.5 million (26.5% of total revenues), up 17.5% year over year. Moreover, research & development expenses (24.5% of total revenues) decreased 16.6% year over year to $56.1 million.
Wolfspeed incurred a non-GAAP operating loss of $101.9 million, wider than the operating loss of $62.3 million in the year-ago quarter.
Wolfspeed Price, Consensus and EPS Surprise
Wolfspeed price-consensus-eps-surprise-chart | Wolfspeed Quote
Balance Sheet & Cash Flow
As of Mar 26, 2023, WOLF had cash, cash equivalents and short-term investments of $2.25 billion.
In the fiscal third quarter, Wolfspeed reported cash outflow from operations of $11 million compared with $28.4 million in the fiscal first quarter.
Free cash outflow was $244.9 million in the reported quarter.
Guidance
For fourth-quarter fiscal 2023, Wolfspeed expects revenues in the range of $212-$232 million. The Zacks Consensus Estimate for the quarter’s revenues is pegged at $232.86 million.
Non-GAAP loss is expected to be 17-23 cents per share. The Zacks Consensus Estimate for the quarter’s loss stands at 14 cents per share.
Zacks Rank & Stocks to Consider
Wolfspeed currently has a Zacks Rank #3 (Hold).
WOLF’s shares have fallen 37.6% compared with the Zacks Computer and Technology sector’s decline of 3.9% in the past year.
Here are some better-ranked stocks worth considering in the broader sector.
DigitalOcean DOCN, Arista Networks ANET, and Audioeye AEYE are some better-ranked stocks that investors can consider in the broader sector. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DigitalOcean shares have fallen 22.2% in the past year. DOCN is scheduled to release its first-quarter 2023 results on May 9.
Arista Networks’ shares have risen 35.4% in the past year. ANET is scheduled to release its first-quarter 2023 results on May 1.
Audioeye shares have gained 44.2% in the past year. AEYE is scheduled to report its first-quarter 2023 results on May 11.
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