Credo Technology Group Holding Ltd. (NASDAQ:CRDO) shares are down during Tuesday’s premarket session following the company’s recent third-quarter earnings report.
The stock’s decline comes as it reported strong quarterly results, but broader market pressures are adding to the downward momentum, with major indices experiencing losses on the previous trading day.
CRDO Earnings Beat with Strong Growth
Credo Technology, on Monday, reported quarterly adjusted earnings of $1.07 per share, surpassing the consensus estimate of 95 cents, while revenue reached $407.01 million, exceeding the $400.23 million forecast.
CEO Bill Brennan highlighted the significant growth, noting that revenue increased by over 50% sequentially and 200% year-over-year.
“With continued growth in AECs and ICs and the announcement of three new multi-billion dollar TAM expansions through ZeroFlap optics, ALCs, and OmniConnect, we remain confident in our ability to innovate and grow in the expanding AI infrastructure landscape,” Brennan commented in a press release on Monday.
In addition, the company expects fourth-quarter revenue to fall between $425 million and $435 million, which is above the analyst estimate of $422.61 million.
The maker of high-speed connectivity systems for AI data centers expects adjusted gross margin to be between 64% and 66%.
On Monday, Credo Technology acquired CoMira Solutions for an undisclosed consideration.
The acquisition of CoMira brings specialized link layer, error correction (ECC), and security semiconductor IP to support the development of new and advanced system-level solutions for scale-up and scale-out AI architectures.
The broader market experienced declines on the previous trading day, with the Nasdaq down 2.16% and the S&P 500 falling 1.66%. This broader market weakness may be contributing to CRDO’s struggles, as the stock’s drop occurred despite its strong earnings performance.
CRDO Faces Bearish Technical Indicators
Currently, the stock is trading 9.8% below its 20-day simple moving average (SMA) and 4.1% below its 100-day SMA, indicating a bearish trend in the short to medium term. Over the past 12 months, shares have decreased significantly, and they are currently positioned closer to their 52-week lows than highs.
The RSI is at 44.45, which is considered neutral territory, suggesting that the stock is neither overbought nor oversold. Meanwhile, MACD is at 0.15, below its signal line at 0.22, indicating bearish pressure on the stock.
The combination of neutral RSI and bearish MACD suggests mixed momentum, indicating that traders should be cautious in the current environment.
- Key Resistance: $105.00
- Key Support: $95.00
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $167.23. Recent analyst moves include:
- Needham: Buy (Maintains Target to $220.00) (Feb. 10)
- Roth Capital: Buy (Lowers Target to $200.00) (Feb. 10)
- Rosenblatt: Initiated with Neutral (Target $170.00) (Jan. 21)
CRDO Price Action: Credo Technology Group shares were down 14.15% at $98.06 during premarket trading on Tuesday, according to Benzinga Pro data.
Photo by bluestork via Shutterstock
