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Wolfspeed (WOLF) Soars 38.6%: Is Further Upside Left in the Stock?

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Wolfspeed (WOLF - Free Report) shares soared 38.6% in the last trading session to close at $6.68. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 38.6% loss over the past four weeks.

Wolfspeed is benefiting from its transformation into a pure-play silicon carbide provider through portfolio optimization, including the sale of its RF business. It has also recently completed an offering of 27.8 million shares, raising approximately $200 million to enhance its capital structure, reduce leverage, and address outstanding maturities.

This maker of energy-efficient lighting is expected to post quarterly loss of $1.01 per share in its upcoming report, which represents a year-over-year change of -83.6%. Revenues are expected to be $179.37 million, down 13.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Wolfspeed, the consensus EPS estimate for the quarter has been revised 0.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on WOLF going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Wolfspeed is part of the Zacks Semiconductor - Discretes industry. Vishay Intertechnology (VSH - Free Report) , another stock in the same industry, closed the last trading session 2.4% higher at $16.46. VSH has returned -8.2% in the past month.

For Vishay, the consensus EPS estimate for the upcoming report has changed -81.8% over the past month to $0.11. This represents a change of -70.3% from what the company reported a year ago. Vishay currently has a Zacks Rank of #3 (Hold).


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