Strength Seen in Wolfspeed, Inc. (WOLF): Can Its 13.2% Jump Turn into More Strength?

Wolfspeed, Inc. WOLF shares ended the last trading session 13.2% higher at $35.28. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 16.1% gain over the past four weeks.

Wolfspeed’s rally is largely driven by optimism over higher sales of Power Product offerings, driven by an increase in demand for industrial applications products and growth in emerging applications for silicon carbide devices such as AI and data center applications. The recent launch of the fifth-generation SiC MOSFET also bodes well for the company.

This company is expected to post quarterly loss of $1.99 per share in its upcoming report, which represents a year-over-year change of -261.8%. Revenues are expected to be $150 million, down 23.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Wolfspeed, Inc., the consensus EPS estimate for the quarter has been revised 10.2% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate 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, Inc. is part of the Zacks Manufacturing - General Industrial industry. Generac Holdings GNRC, another stock in the same industry, closed the last trading session 4.3% higher at $216.8. GNRC has returned 13.6% in the past month.

For Generac Holdings, the consensus EPS estimate for the upcoming report has changed -1.2% over the past month to $2.39. This represents a change of +30.6% from what the company reported a year ago. Generac Holdings currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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