Latest news with #CredoTechnology
Globe and Mail
an hour ago
- Business
- Globe and Mail
Why Credo Technology Stock Exploded Higher Today
Shares of San Jose-based high-speed connectivity solutions provider Credo Technology Group (NASDAQ: CRDO) stock jumped 24.5% through 10:10 a.m. ET this morning after beating analyst forecasts last night. Heading into its fiscal fourth quarter of 2025, analysts forecast Credo would earn only $0.27 per share on less than $160 million in sales. In fact, Credo reported last night, it earned $0.35 per share, adjusted for one-time items, and sales were $170 million, for the period ended May 3. Credo's Q4 earnings Not all the news is good. Sales surged nearly 180% year over year, which is great. Earnings as calculated according to generally accepted accounting principles (GAAP) were up only 25%, however, despite the impressive "adjusted" earnings beat. Actual GAAP profits for the quarter were only $0.20 -- not $0.35. Still, CEO Bill Brennan said he was "proud" of the company's achievements in 2025. For the full year, sales grew 126%, while cost of revenue grew only 109%, improving the company's gross profit margin. And operating costs grew only 57%, improving the company's operating profit margin even more. For both the quarter and the year, Credo flipped from operating and net losses to operating and net profits. GAAP profit for the year was $0.29 per share. Is Credo stock a buy? So no wonder investors are pleased. And it didn't hurt that Credo guided investors to expect further sales growth (about $190 million, triple last year's Q1 sales) and a further improved gross margin (about 64.5%) in fiscal Q1 2026, currently underway. At a valuation of more than 260 times trailing earnings, Credo stock is anything but a cheap stock. But if it keeps growing sales at its current pace, and expanding profit margins besides, this stock could still be a good growth stock -- and a buy. Should you invest $1,000 in Credo Technology Group right now? Before you buy stock in Credo Technology Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Credo Technology Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor 's total average return is987% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Yahoo
10 hours ago
- Business
- Yahoo
Credo Technology Group Holding Ltd (CRDO) Q4 2025 Earnings Call Highlights: Record Revenue ...
Q4 Revenue: $170 million, a 26% sequential increase and up 180% year over year. Fiscal Year '25 Revenue: $437 million, growth of 126% year over year. Q4 Non-GAAP Gross Margin: 67.4%. Fiscal Year '25 Non-GAAP Gross Margin: 65%. Q4 Non-GAAP Operating Income: $62.5 million. Q4 Non-GAAP Operating Margin: 36.8%. Q4 Non-GAAP Net Income: $65.3 million. Q4 Non-GAAP Net Margin: 38.4%. Q4 Cash Flow from Operations: $57.8 million. Q4 CapEx: $3.7 million. Q4 Free Cash Flow: $54.2 million. Cash and Equivalents at Quarter End: $431.3 million. Q4 Ending Inventory: $90 million. Q1 Fiscal '26 Revenue Guidance: $185 million to $195 million. Q1 Fiscal '26 Non-GAAP Gross Margin Guidance: 64% to 66%. Q1 Fiscal '26 Non-GAAP Operating Expenses Guidance: $54 million to $56 million. Fiscal Year '26 Revenue Expectation: Exceed $800 million, growth over 85% year over year. Fiscal Year '26 Non-GAAP Net Margin Expectation: Approach 40%. Warning! GuruFocus has detected 3 Warning Signs with CRDO. Release Date: June 02, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Credo Technology Group Holding Ltd (NASDAQ:CRDO) reported a significant revenue increase of 180% year over year for Q4, reaching $170 million. The company achieved a non-GAAP gross margin of 67.4% in Q4, indicating strong profitability. Credo's fiscal year 2025 revenue grew by 126% year over year, reaching $437 million, showcasing robust growth. The company has successfully diversified its customer base, with three hyperscalers each contributing over 10% of revenue. Credo's innovative connectivity solutions have positioned it well to capitalize on the expanding AI infrastructure market. The company faces risks and uncertainties related to forward-looking statements, which could impact future performance. Despite strong growth, there is a potential for variability in customer mix and revenue contributions from quarter to quarter. Gross margin expansion may not always be linear due to differences in product mix and other factors. The company anticipates increased capital expenditures, potentially doubling due to upcoming 3-nanometer tape-outs. Tariff risks and macroeconomic factors could impact the company's operations and financial performance. Q: Can you provide details on the revenue contribution from your largest customers and the outlook for fiscal '26? A: Daniel Fleming, CFO, stated that the largest customer accounted for 61% of revenue, with two others at 12% and 11%. Credo expects continued diversification with two additional hyperscalers joining in the second half of fiscal '26, although exact projections are challenging. The company is optimistic about revenue diversification as their solutions gain broader adoption. Q: Why is there a projected decrease in gross margin for Q1 despite increased scale benefits? A: Daniel Fleming explained that while scale benefits are evident, gross margin expansion won't always be linear due to product mix variations. The Q1 gross margin is guided at 65% at the midpoint, reflecting these variations. The company is not setting a new long-term model but expects margins to remain at or above the high end of expectations. Q: Can you elaborate on the use cases for your AEC products and the transition to 800-gig upgrades? A: William Brennan, CEO, noted that AECs are primarily used for connecting servers with switches, with significant volume in scale-out back-end networks for AI. The transition from 50 gig to 100 gig per lane is expected to gain momentum towards the end of fiscal '26, although some customers have already moved to 100 gig per lane. Q: How are tariffs impacting your gross margin and what measures are you taking? A: Daniel Fleming mentioned that tariffs are not significantly impacting gross margins. William Brennan added that Credo is monitoring the situation closely and is prepared to shift production geographically if necessary, ensuring flexibility and efficiency in delivering solutions. Q: What is the outlook for your optical DSP business and its impact on future growth? A: William Brennan highlighted strong progress in the optical DSP business, with plans to double revenue in fiscal '26. The focus is on 100 gig per lane designs, with significant interest in power-efficient solutions for AI networks. The company is well-positioned for future growth as the market transitions to 200 gig per lane. Q: How does Credo's pilot software platform differentiate from competitors? A: William Brennan explained that the pilot platform offers advanced diagnostic and telemetry capabilities, providing visibility into SerDes IP, retimer ICs, and system-level solutions. This platform enhances reliability and uptime stability, setting a new benchmark in the competitive space. Q: What are the strategic priorities for Credo's IP business moving forward? A: William Brennan stated that while the IP business will remain below 5% of total revenue, it will focus on strategic engagements that enable system-level solutions with key customers. The company will be opportunistic but prioritize strategic value over revenue percentage. Q: How does Credo plan to manage supply chain constraints amid rapid growth? A: William Brennan assured that Credo has demonstrated the ability to ramp production quickly, with strong relationships across the supply chain. The company is well-prepared to handle significant growth, leveraging its systems operations team's close ties with suppliers to ensure timely delivery. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
3 days ago
- Business
- Forbes
Will CRDO Stock Rise After Earnings?
POLAND - 2025/02/19: In this photo illustration, the Credo Technology company logo is seen displayed ... More on a smartphone screen. (Photo Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images) Credo Technology (NASDAQ:CRDO), a company specializing in electrical cable and interconnect products, is set to announce its earnings on Monday, June 2, 2025. For traders focused on events, historical data since 2022 indicates that the stock has nearly an equal probability of rising or declining following its earnings announcement. CRDO recorded a positive one-day return in 54% of cases after earnings releases over the past three years. In the instances of positive performance, the median one-day return was quite significant at 23.2%, with a maximum positive one-day return of 47.9%. This underscores the considerable volatility the stock undergoes around earnings announcements. While the actual performance relative to analyst expectations and market forecasts will be crucial, recognizing these historical trends can provide an edge to event-driven traders. There are two primary strategies to consider: Analysts expect Credo Technology to announce earnings of $0.27 per share on revenues of $159.59 million. This marks a notable increase compared to the same quarter last year, when the company reported earnings of $0.07 per share on sales of $60.78 million. From a fundamental perspective, Credo Technology currently has a market capitalization of $10 billion. In the past year, the company generated $328 million in revenue. It reported an operating loss of $3.8 million but achieved a net income of $5.1 million. Therefore, if you are seeking potential gains with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative — it has outperformed the S&P 500 and delivered returns exceeding 91% since its inception. Separately, see – What's Behind The 400% Rise In IONQ Stock? View earnings reaction history of all stocks Some insights on one-day (1D) post-earnings returns: Additional data concerning observed 5-Day (5D) and 21-Day (21D) returns following earnings releases are summarized alongside the statistics in the table below. CRDO 1D, 5D, and 21D Post Earnings Returns A relatively lower risk strategy (though ineffective if the correlation is weak) involves understanding the correlation between short-term and medium-term returns after earnings, identifying a pair that demonstrates the highest correlation, and executing the corresponding trade. For instance, if 1D and 5D exhibit the strongest correlation, a trader can position themselves "long" for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data derived from the 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and the subsequent 5D returns. CRDO Correlation Between 1D, 5D and 21D Historical Returns At times, the performance of peers can impact the stock reaction following earnings. In fact, the pricing may start to adjust before the earnings announcements are made. Below is historical data comparing the post-earnings performance of Credo Technology stock with the stock performance of peers that announced earnings just prior to Credo Technology. For an accurate comparison, peer stock returns also reflect post-earnings one-day (1D) returns. CRDO Correlation With Peer Earnings Discover more about Trefis RV strategy which has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000), generating strong returns for investors. Additionally, if you prefer upside with a more stable experience than investing in an individual stock like Credo Technology, consider the High Quality portfolio, which has outperformed the S&P and achieved >91% returns since its inception.
Yahoo
3 days ago
- Business
- Yahoo
Credo Technology Group Holding Ltd (CRDO): A Bull Case Theory
We came across a bullish thesis on Credo Technology Group Holding Ltd (CRDO) on Deep Value Returns' Substack. In this article, we will summarize the bulls' thesis on CRDO. Credo Technology Group Holding Ltd (CRDO)'s share was trading at $63.65 as of 27th May. CRDO's trailing and forward P/E were 2120 and 56.50 respectively according to Yahoo Finance. A robotic arm holding a semiconductor chip, emphasizing the precision and quality of the company's production equipment. Credo Technology (CRDO) is poised to report its fiscal Q4 2025 earnings, and while it appears expensive trading at roughly 105x forward free cash flow, the company presents a compelling risk-reward opportunity. Despite concerns around potential slowing growth rates weighing on the stock, these risks are already largely priced in, allowing for a bullish outlook. The business has multiple levers to drive long-term value, and the reaffirmed price target of $105 by early 2026 reflects confidence in its growth trajectory. The stock has experienced volatility recently, with a significant sell-off earlier in the year followed by a strong recovery, illustrating that short-term trading or stop-loss strategies would have hurt investors who exited prematurely. Instead, a disciplined, patient approach aligned with a long-term holding strategy is advocated, focusing on capturing the majority of the stock's upward movement as the market better understands the company's prospects. The author warns against chasing short-term gains around earnings announcements, noting that many investors may buy ahead of earnings hoping for a quick pop, only to face disappointment and losses, missing out on subsequent rebounds. This reinforces the importance of sticking to a steady investment approach rather than attempting to time market tops and bottoms. Overall, while the valuation looks high, Credo Technology's resilience, growth potential, and recent price behavior support a positive investment thesis for patient investors willing to hold through volatility and capitalize on its strategic upside over the coming year. Previously, we have covered Credo Technology Group Holding Ltd (CRDO) in March 2025, wherein we summarized a bullish thesis by Nikhs on Substack. The author stated that the company's earnings showed strong growth, with revenue up 154% and improved margins, driven by its reliable AI connectivity solutions. A major hyperscaler, likely Amazon, accounted for most revenue, while management expected continued growth and broader customer adoption. Since our last coverage, the stock is up 37% as of 28th May. Credo Technology Group Holding Ltd (CRDO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held CRDO at the end of the first quarter which was 43 in the previous quarter. While we acknowledge the risk and potential of CRDO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CRDO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
10-05-2025
- Business
- Yahoo
Credo Technology Group Holding Ltd (CRDO): Among Billionaire David E. Shaw's Small-Cap Stock Picks with Huge Upside Potential
We recently published a list of . In this article, we are going to take a look at where Credo Technology Group Holding Ltd (NASDAQ:CRDO) stands against billionaire David E. Shaw's other small-cap stock picks with huge upside potential. David E. Shaw is one billionaire investor whose record speaks for itself on Wall Street. Having founded D.E. Shaw & Co., L.P. in 1988 with $28 million in capital, the fund has grown to become one of the most successful and biggest, with a 13F portfolio worth $136.27 billion. Amid the growth, Shaw's hedge fund D E Shaw has also returned significant returns to shareholders. The fund's flagship Composite fund has achieved an annualized net return of 12.7% since inception in 2001, as the Oculus Fund has averaged 13.7% annually since 2004 and has never had a negative year. Shaw's hedge fund was one of the earliest to leverage complex trading algorithms, followed by some form of human-run investing. Consequently, the multi-strategy fund remains the rage on Wall Street, given its solid returns over the years and the growing trend of returning gains to investors. READ ALSO: Billionaire Paul Tudor Jones' 10 Stocks Picks with Huge Upside Potential and Billionaire Quants' Two Sigma's 10 Stock Picks with Huge Upside Potential. Composite hedge fund gained 18% in 2024, with Oculus outperforming the overall market, soaring 36% and recording its best gain since inception. The better-than-expected returns come on Shaw and the other fund managers deploying systematic and computer-driven trading strategies to identify stocks trading at discounted valuations before they explode. Following the impressive performance in 2024, reports emerged that the hedge fund was planning to return billions of dollars to external clients, as has been the trend. Amid the impressive performance last year, D.E. Shaw & Co. finds itself at a crossroads as the overall stock market has turned bearish. Major US indices have pulled back by about 6% from record highs amid recession concerns and deteriorating macroeconomics attributed to the US trade war. The US Federal Reserve holding interest rates unchanged, waiting to see the impact of President Donald Trump's trade policy, continues to rattle sentiments in the equity market. The Federal Reserve held its benchmark rate unchanged at between 4.25% and 4.5%, much to the anguish of Trump. In its statement, the Fed noted the uncertainty around the economic outlook. 'Uncertainty about the economic outlook has increased further,' the statement said. 'The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have raised.' Acknowledging that tariffs could worsen inflation and hinder economic expansion, the statement introduces the likelihood of a stagflation scenario, a phenomenon that has been largely missing from the US economy since the early 1980s. Decision-makers have mostly concurred that the central bank is currently well-placed, as the economy is performing reasonably well at this time, to exercise patience while fine-tuning monetary policy. Amid the economic uncertainty, focus in the equity markets is slowly shifting towards small-cap stocks with significant upside potential. That's partly because large-cap stocks are under pressure after skyrocketing to record highs, resulting in valuations above historical norms. Billionaire David E. Shaw's portfolio boasts of solid small-cap stocks with tremendous upside potential. We combed D. E. Shaw's SEC Q4 2024 13F filings to identify Billionaire David E. Shaw's 10 Small-Cap Stock Picks with Huge Upside Potential. We then settled on stocks with less than $10 billion in market cap and analyzed why the stocks stand out, as solid investments well poised to generate significant long-term value. Finally, we ranked the stocks in ascending order based on the stocks upside potential. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). An engineer in a cleanroom testing and tweaking an integrated circuit. Credo Technology Group Holding Ltd (NASDAQ:CRDO) is a technology company that provides high-speed connectivity solutions for optical and electrical Ethernet applications. Its products include HiWire active electrical cables, optical digital signal processors, and SerDes IP. The company is increasingly capitalizing on the growing demand for its solutions in the data infrastructure market, affirming why it is one of billionaire David E. Shaw's 10 small-cap stock picks with tremendous upside potential. Companies around the world are making significant investments in data centers to facilitate cloud computing and artificial intelligence. Consequently, global data center capital expenditures increased by almost 50% to about $455 billion in 2024 alone. As a result, Credo Technology Group Holding Ltd's (NASDAQ:CRDO) products, especially its Active Electrical Cables (AECs), are in high demand due to the continuous expansion of AI infrastructure. As businesses assemble enormous clusters of AI servers, they need a ton of bandwidth to transfer data effectively. The AECs from Credo Technology Group Holding Ltd (NASDAQ:CRDO) are made explicitly for that use. Credo Technology delivered robust third-quarter FY2025 financial results, surpassing market expectations. Revenue rose 154% year over year to $135 million as earnings per share came in at $0.25 against $0.18 expected. Overall, CRDO ranks 8th on our list of billionaire David E. Shaw's small-cap stock picks with huge upside potential. While we acknowledge the potential of CRDO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CRDO but that trades at less than 5 times its earnings check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
