Wolfspeed (NYSE: NYSE:WOLF) has received a reiterated Market Perform rating from a William Blair analyst, who expressed expectations for the company to meet its current quarter's financial targets.
However, concerns were raised about future guidance, with predictions of a significant revision. The analyst pointed to anticipated yield losses at Wolfspeed's Durham facility, projecting an operational cash burn exceeding $200 million over the next two quarters.
The company's financial position is under scrutiny as the analyst anticipates that, without adjustments to capital expenditure plans or additional funding, Wolfspeed could breach its Apollo minimum cash covenant of $500 million by March 2025. I
Wolfspeed is scheduled to report its fourth-quarter results after the market closes on Wednesday, August 21. The upcoming report is awaited with particular interest due to the potential implications for the company's financial trajectory and adherence to its covenant requirements.
In other recent news, Wolfspeed has been the subject of multiple analyst adjustments and company developments. For instance, JPMorgan (NYSE:JPM) has reduced Wolfspeed's price target to $25 from $31, maintaining a neutral rating due to concerns about the semiconductor company's balance sheet and demand for electric vehicles.
On the other hand, TD Cowen has retained a hold rating on Wolfspeed, despite an equipment incident at the company's Durham 150mm device fabrication plant. Canaccord Genuity has maintained a buy rating but lowered its price target due to concerns over electric vehicle demand and industry liquidity issues.
In terms of company developments, Wolfspeed's Mohawk Valley silicon carbide fabrication facility has achieved a 20% wafer start utilization rate. However, the company has delayed the construction of its $3 billion chip plant in Germany, focusing instead on increasing production at its New York site.
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