A significant driver of top-line growth: Credo Technology Group Holding Ltd (CRDO)

Credo Technology Group Holding Ltd (NASDAQ: CRDO) stock jumped 4.92% on Friday to $16.00 against a previous-day closing price of $15.25. With 1.69 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.53 million shares. During the session, the Communication Equipment company that operates in wider Technology sector, reached to the highest price of $16.20 whereas the lowest price it dropped to was $15.51. The 52-week range on CRDO shows that it touched its highest point at $18.00 and its lowest point at $8.61 during that stretch. It currently has a 1-year price target of $17.69.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of CRDO was up-trending over the past week, with a rise of 15.19%, but this was up by 39.37% over a month. Three-month performance surged to 40.11% while six-month performance rose 25.00%. A look at the trailing 12-month EPS for CRDO yields -0.16 with Next year EPS estimates of 0.50. For the next quarter, that number is 0.03. This implies an EPS growth rate of -27.60% for this year and 225.49% for next year.

Float and Shares Shorts:

At present, 144.50 million CRDO shares are outstanding with a float of 96.41 million shares on hand for trading. On Jul 14, 2022, short shares totaled 7.09 million, which was 4.88% higher than short shares on Jun 14, 2022. In addition to Mr. William J. Brennan as the firm’s Pres, CEO & Director, Mr. Daniel Fleming serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 26.62% of CRDO’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 9.21% of CRDO, in contrast to 8.71% held by mutual funds. Shares owned by individuals account for 10.74%. As the largest shareholder in CRDO with 6.02% of the stake, Capital Research & Management Co holds 8,750,082 shares worth 8,750,082. A second-largest stockholder of CRDO, MassAve Global, Inc., holds 4,332,468 shares, controlling over 2.98% of the firm’s shares. BlackRock Investment Management is the third largest shareholder in CRDO, holding 1,923,431 shares or 1.32% stake. With a 5.64% stake in CRDO, the American Funds Small Cap World Fu is the largest stakeholder. A total of 8,194,682 shares are owned by the mutual fund manager. The BlackRock Global Funds – Next Gen, which owns about 1.32% of CRDO stock, is the second-largest Mutual Fund holder. It holds 1,923,431 shares valued at 22.47 million. Vanguard Total Stock Market Index holds 0.43% of the stake in CRDO, owning 623,000 shares worth 7.28 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for CRDO since 8 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 0 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With CRDO analysts setting a high price target of $20.00 and a low target of $15.00, the average target price over the next 12 months is $17.69. Based on these targets, CRDO could surge 25.0% to reach the target high and fall by -6.25% to reach the target low. Reaching the average price target will result in a growth of 10.56% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. CRDO will report FY 2023 earnings on 06/01/2023. Analysts have provided yearly estimates in a range of $0.18 being high and $0.14 being low. For CRDO, this leads to a yearly average estimate of $0.15. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Credo Technology Group Holding Ltd surprised analysts by $0.02 when it reported $0.02 EPS against a consensus estimate of $0.00. The surprise factor in the prior quarter was $0.04. Based on analyst estimates, the high estimate for the next quarter is $0.03 and the low estimate is $0.03. The average estimate for the next quarter is thus $0.03.

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