Credo Technology Group (NASDAQ:CRDO) Shares Gap Up - Still a Buy?

Key Points

• Shares jumped at the open: Credo opened at $124.73 versus its prior close of $112.33, then traded near $118.90.
• Analyst sentiment remains positive: The consensus rating is “Moderate Buy,” with an average price target of $262.67, though one firm downgraded the stock to Hold.
• Quarterly results topped estimates: Credo reported EPS of $1.20 versus $1.17 expected and revenue of $479 million, up 114.7% year over year. Insiders have also sold 352,538 shares worth about $67.2 million over the past 90 days.

Credo Technology Group Holding Ltd. (NASDAQ:CRDO - Get Free Report) gapped up before the market opened on Friday. The stock had previously closed at $112.33, but opened at $124.73. Credo Technology Group shares last traded at $118.8970, with a volume of 2,384,498 shares traded.

Wall Street Analyst Weigh In

Several equities analysts have issued reports on CRDO shares. Wall Street Zen downgraded shares of Credo Technology Group from a "buy" rating to a "hold" rating in a report on Saturday, August 1st. Susquehanna raised their price objective on shares of Credo Technology Group from $235.00 to $250.00 and gave the stock a "positive" rating in a research report on Tuesday, July 21st. Barclays upped their price target on Credo Technology Group from $260.00 to $300.00 and gave the company an "overweight" rating in a research note on Monday, July 20th. Rosenblatt Securities restated a "neutral" rating and set a $235.00 price target on shares of Credo Technology Group in a research note on Thursday, October 15th. Finally, TD Cowen raised their price target on shares of Credo Technology Group from $260.00 to $300.00 and gave the company a "buy" rating in a research report on Tuesday, August 18th. One analyst has rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $262.67.

Credo Technology Group Trading Up 5.9%

The company has a market capitalization of $22.36 billion, a PE ratio of 42.74, a P/E/G ratio of 0.54 and a beta of 3.29. The firm has a 50 day simple moving average of $181.07 and a two-hundred day simple moving average of $180.45.

Credo Technology Group (NASDAQ:CRDO - Get Free Report) last issued its earnings results on Tuesday, September 1st. The company reported $1.20 earnings per share for the quarter, beating the consensus estimate of $1.17 by $0.03. Credo Technology Group had a net margin of 33.83% and a return on equity of 28.77%. The business had revenue of $479.00 million for the quarter, compared to the consensus estimate of $473.30 million. During the same quarter in the previous year, the firm earned $0.52 earnings per share. The business's quarterly revenue was up 114.7% compared to the same quarter last year. Research analysts expect that Credo Technology Group Holding Ltd. will post 5.02 earnings per share for the current fiscal year.

Insiders Place Their Bets

In related news, insider James Laufman sold 5,000 shares of the company's stock in a transaction on Thursday, October 1st. The stock was sold at an average price of $205.00, for a total transaction of $1,025,000.00. Following the transaction, the insider owned 164,223 shares of the company's stock, valued at $33,665,715. This represents a 2.95% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, CEO William Brennan sold 16,666 shares of the stock in a transaction on Monday, October 19th. The stock was sold at an average price of $174.87, for a total value of $2,914,383.42. Following the completion of the transaction, the chief executive officer owned 1,584,164 shares of the company's stock, valued at $277,022,758.68. The trade was a 1.04% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 352,538 shares of company stock worth $67,200,077. Corporate insiders own 9.06% of the company's stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Bank of America Corp DE boosted its holdings in shares of Credo Technology Group by 13.7% during the second quarter. Bank of America Corp DE now owns 2,182,764 shares of the company's stock worth $593,603,000 after purchasing an additional 262,479 shares during the last quarter. Atreides Management LP raised its position in Credo Technology Group by 3.5% in the second quarter. Atreides Management LP now owns 1,129,285 shares of the company's stock valued at $307,109,000 after purchasing an additional 38,052 shares during the period. Pictet Asset Management Holding SA boosted its holdings in Credo Technology Group by 222.5% in the 3rd quarter. Pictet Asset Management Holding SA now owns 740,487 shares of the company's stock worth $144,170,000 after acquiring an additional 510,905 shares during the period. The Manufacturers Life Insurance Company grew its holdings in Credo Technology Group by 192.1% during the 1st quarter. The Manufacturers Life Insurance Company now owns 1,047,084 shares of the company's stock valued at $98,290,000 after purchasing an additional 688,596 shares in the last quarter. Finally, Value Aligned Research Advisors LLC acquired a new position in shares of Credo Technology Group in the second quarter worth about $91,919,000. 80.46% of the stock is currently owned by institutional investors and hedge funds.

About Credo Technology Group

Credo Technology Group Holding Ltd. is a fabless semiconductor and connectivity solutions company that develops high-speed data-infrastructure technologies. Its products are designed to help data centers and communications networks move large volumes of information with lower power consumption and improved signal integrity.

The company's portfolio includes serializer/deserializer (SerDes) intellectual property, application-specific integrated circuits, active electrical cables, optical digital signal processors and related connectivity platforms.

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