Credo Technology Group Holding Ltd (NASDAQ:CRDO) reported that its Chief Technology Officer, Cheng Chi Fung, has sold a significant number of shares in the company. According to the latest SEC filings, the CTO disposed of 55,000 ordinary shares at varying prices ranging from $27.04 to $28.03, with the weighted average sale price coming in at $27.492 per share. This transaction resulted in a total sale value of over $1.5 million.
The sales were conducted under a pre-arranged Rule 10b5-1 trading plan, which was adopted by the Cheng Huang Family Trust on September 7, 2023. Rule 10b5-1 allows company insiders to set up a predetermined plan to sell company stocks in a way that avoids accusations of insider trading. The Cheng Huang Family Trust, where Cheng Chi Fung and his spouse are trustees and beneficiaries alongside their children, still retains a substantial number of shares following this transaction. Post-sale, the trust holds 9,498,602 ordinary shares of Credo Technology Group.
Footnotes to the SEC filing indicate that Cheng Chi Fung disclaims beneficial ownership of the shares except to the extent of his and his spouse’s pecuniary interest. The shares sold were held by the Cheng Huang Family Trust, underscoring the CTO's indirect ownership.
Investors often keep a close eye on insider transactions as they can provide insights into executives' perspectives on the company's future prospects. However, it's important to note that such sales do not necessarily indicate a lack of confidence in the company and may be part of personal financial planning strategies.
Credo Technology Group Holding Ltd specializes in semiconductors and related devices and is incorporated with a fiscal year-end of April 29. The company's shares are traded on the NASDAQ under the ticker symbol CRDO.
In other recent news, Credo Technology Group Holding Ltd. experienced a significant upgrade in its stock rating from TD Cowen, shifting from Hold to Buy. This development was accompanied by a raised price target for Credo's shares, now standing at $35.00, up from the previous target of $24.00. TD Cowen's upgrade is based on a positive outlook on Credo's role in advancing higher line-rate speeds, essential beyond 800G, and the company's potential for revenue growth and expansion across various programs and products.
Credo Technology Group Holding Ltd. also reported record revenues for the fourth quarter of fiscal year 2024, primarily driven by its artificial intelligence (AI) applications. The company's Q4 revenue reached a record $60.8 million, marking an 89% increase year-over-year. AI deployments were a key growth driver, contributing to approximately three-quarters of Q4 revenue.
Furthermore, Credo anticipates a continued expansion in AI revenue and a strategic focus on customer-specific solutions. The company expects AI revenue to double from Q4 fiscal year '24 to Q4 fiscal year '25. However, Q1 revenue for fiscal year '25 is forecasted to be between $58 million and $61 million, indicating a 2% sequential decrease. The company's IP business also saw substantial growth, generating $16.6 million in Q4, up 193% year-over-year.
InvestingPro Insights
As Credo Technology Group Holding Ltd (NASDAQ:CRDO) navigates the market following the recent insider share sale by its CTO, investors are considering various facets of the company's financial health and growth prospects. According to InvestingPro data, Credo's market capitalization stands at $4.46 billion, reflecting the company's substantial size in the semiconductor sector. Despite a negative P/E ratio of -134.92, indicating that the company is currently not profitable, the revenue growth is notable, with a quarterly increase of 89.42% as of the last twelve months ending Q4 2024.
Investors analyzing the company's performance will find that Credo holds a strong gross profit margin of 61.89%, suggesting efficient management of the costs associated with their goods sold. The InvestingPro data also shows that the company's share price has performed remarkably well over the past year, with a one-year price total return of 56.48%, and is trading near its 52-week high at 98.2% of that value.
Among the InvestingPro Tips, it's worth noting that analysts have revised their earnings upwards for the upcoming period, which could be a positive sign for future profitability. Additionally, Credo's strong cash position, with more cash than debt on its balance sheet, provides a cushion for operational flexibility and potential growth investments.
For those looking to delve deeper into Credo's financials and future outlook, InvestingPro offers additional insights. There are currently 16 more InvestingPro Tips available for Credo Technology Group Holding Ltd, which can be found at https://www.investing.com/pro/CRDO. These tips could help investors make more informed decisions about their holdings in CRDO. Moreover, for access to these valuable insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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