Credo Technology Reports Strong Q3 Results, Shares Drop 12.5%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 hours ago
0mins
Should l Buy CRDO?
Source: seekingalpha
- Strong Earnings Beat: Credo Technology reported an adjusted earnings per share of $1.07 for the fiscal third quarter ending January 31, with revenue soaring 201.5% year-over-year to $407.01 million, yet shares fell 12.5%, indicating investors' higher expectations for future growth.
- Upward Revenue Guidance: The company anticipates revenue between $404 million and $408 million, exceeding its previous guidance of $335 million to $345 million, reflecting optimism about market demand, particularly in the expanding AI infrastructure sector.
- Margin and Expense Forecast: Credo expects adjusted gross margins to range from 64% to 66%, while adjusted operating expenses are projected between $76 million and $80 million, demonstrating the company's commitment to innovation and market share expansion while managing costs effectively.
- Positive Market Outlook: With ongoing growth in AECs and ICs, alongside the launch of new multi-billion dollar initiatives like ZeroFlap optics, ALCs, and OmniConnect, Credo's potential for expansion in the AI infrastructure market remains strong, despite short-term stock fluctuations, indicating a positive long-term growth outlook.
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Analyst Views on CRDO
Wall Street analysts forecast CRDO stock price to rise
13 Analyst Rating
12 Buy
1 Hold
0 Sell
Strong Buy
Current: 112.270
Low
170.00
Averages
221.82
High
260.00
Current: 112.270
Low
170.00
Averages
221.82
High
260.00
About CRDO
Credo Technology Group Holding Ltd is a Cayman Islands-based holding company. The Company delivers high-speed solutions to break bandwidth barriers on every wired connection in the data infrastructure market. It provides high-speed connectivity solutions that deliver improved power efficiency as data rates and corresponding bandwidth requirements increase exponentially throughout the data infrastructure market. Its connectivity solutions are optimized for optical and electrical Ethernet applications, including the emerging 100 gigabits per second (G), 200G, 400G, 800G and the emerging 1.6 terabits per second (T) port markets. Its products are based on its Serializer/Deserializer (SerDes) and Digital Signal Processor (DSP) technologies. Its product families include integrated circuits (ICs) for the optical and line card markets, active electrical cables (AECs) and SerDes Chiplets. The Company’s intellectual property (IP) solutions consist primarily of SerDes IP licensing.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Credo Technology Q3 Earnings Exceed Expectations
- Strong Earnings Performance: Credo Technology reported a Q3 non-GAAP EPS of $1.07, beating expectations by $0.13, which reflects the company's robust profitability and boosts investor confidence.
- Significant Revenue Growth: The company achieved revenue of $407.01 million in Q3, marking a 201.5% year-over-year increase and surpassing market expectations by $19.39 million, indicating a substantial rise in market demand and product sales.
- Optimistic Future Outlook: For Q4 of fiscal 2026, revenue is projected to be between $425 million and $435 million, exceeding the consensus estimate of $410.97 million, showcasing the company's confidence in future growth.
- Effective Cost Control: GAAP gross margin is expected to range from 63.9% to 65.9%, while non-GAAP gross margin is anticipated to be between 64.0% and 66.0%, indicating the company's ability to maintain profitability while effectively managing operating costs.
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Credo Technology Group to Report Q3 Earnings on March 2
- Earnings Report Announcement: Credo Technology Group is set to report its Q3 earnings on March 2, with analysts projecting an EPS of 94 cents and revenue of $387.62 million, indicating a stable performance in the market.
- Market Expectation Analysis: Despite the anticipated EPS and revenue suggesting growth potential, the stock fell by 1.9%, which may indicate that investors are cautious about the upcoming earnings report, fearing that results may not meet expectations.
- Profitability Outlook: Analysts maintain an optimistic view on Credo's profitability, expecting an EPS of 94 cents, suggesting that the company's efforts in cost control and revenue growth may pay off, thereby boosting market confidence.
- Stock Price Volatility Impact: The 1.9% decline in stock price could affect investor sentiment, particularly ahead of the earnings report, as investors may reassess their strategies, leading to short-term market fluctuations.
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U.S.-Iran Conflict Triggers Stock Market Turmoil
- Market Turmoil: The outbreak of the U.S.-Iran conflict led to significant volatility in the U.S. stock market on Monday, impacting investor sentiment and causing instability that could affect short-term investment decisions.
- Nvidia Stock Movement: As a major mover in the market, Nvidia's stock experienced notable fluctuations following the conflict news, reflecting the sensitivity of tech stocks to geopolitical tensions, which may impact its short-term performance.
- Earnings Impact: Credo and MongoDB saw substantial declines after their earnings reports, indicating a strong market reaction to their performance, which could raise concerns among investors regarding the future growth prospects of these companies.
- Investor Sentiment Shift: As the market reacts to the U.S.-Iran situation, investors may reassess their risk appetite, leading to a shift of funds towards safer assets, thereby affecting overall market liquidity.
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U.S. Stocks Close Mixed, Berkshire Falls Amid CEO Shift
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- AST SpaceMobile Surge: AST SpaceMobile's stock surged 9.76% to $86.92, reaching an intraday high of $86.95 despite reporting a fourth-quarter loss of $0.26 per share, wider than the expected $0.19 loss, but with revenue increasing by $52.39 million year-over-year, indicating optimistic market expectations for its future revenue generation.
- MongoDB Earnings Beat: MongoDB's stock decreased by 1.05% to $325.01, even though it reported fourth-quarter earnings of $1.65 per share, surpassing estimates of $1.45, and revenue of $695.07 million, a 26.8% increase year-over-year; however, its lower-than-expected first-quarter EPS guidance led to a 24% drop in after-hours trading.
- Credo Technology Strong Performance: Credo Technology's stock rose 1.74% to $114.22, with adjusted earnings of $1.07 per share beating expectations, and revenue of $407.01 million marking a 200% year-over-year increase; despite guiding fourth-quarter revenue above analyst estimates, shares fell 8.16% in after-hours trading, reflecting market uncertainty about future performance.
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Credo Tech (CRDO) Q3 2026 Earnings Call Transcript
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Credo Technology Reports Strong Q3 Earnings, Stock Drops
- Earnings Beat: Credo Technology reported adjusted earnings of $1.07 per share for Q3, surpassing the consensus estimate of $0.95, indicating a robust profitability trend despite a subsequent stock price drop.
- Significant Revenue Growth: The company achieved quarterly revenue of $407.01 million, exceeding the Street estimate of $400.23 million, with over 50% sequential growth and 200% year-over-year growth, showcasing strong market performance.
- Optimistic Outlook: Credo anticipates Q4 revenue between $425 million and $435 million, above the analyst estimate of $422.61 million, reflecting confidence in continued growth.
- Stock Price Volatility: Despite strong earnings, Credo's stock fell 8.16% to $104.90 in extended trading on Monday, indicating market caution regarding the company's future performance.
See More
Credo Technology Q3 Earnings Exceed Expectations
- Strong Earnings Performance: Credo Technology reported a Q3 non-GAAP EPS of $1.07, beating expectations by $0.13, which reflects the company's robust profitability and boosts investor confidence.
- Significant Revenue Growth: The company achieved revenue of $407.01 million in Q3, marking a 201.5% year-over-year increase and surpassing market expectations by $19.39 million, indicating a substantial rise in market demand and product sales.
- Optimistic Future Outlook: For Q4 of fiscal 2026, revenue is projected to be between $425 million and $435 million, exceeding the consensus estimate of $410.97 million, showcasing the company's confidence in future growth.
- Effective Cost Control: GAAP gross margin is expected to range from 63.9% to 65.9%, while non-GAAP gross margin is anticipated to be between 64.0% and 66.0%, indicating the company's ability to maintain profitability while effectively managing operating costs.
See More
Credo Technology Group to Report Q3 Earnings on March 2
- Earnings Report Announcement: Credo Technology Group is set to report its Q3 earnings on March 2, with analysts projecting an EPS of 94 cents and revenue of $387.62 million, indicating a stable performance in the market.
- Market Expectation Analysis: Despite the anticipated EPS and revenue suggesting growth potential, the stock fell by 1.9%, which may indicate that investors are cautious about the upcoming earnings report, fearing that results may not meet expectations.
- Profitability Outlook: Analysts maintain an optimistic view on Credo's profitability, expecting an EPS of 94 cents, suggesting that the company's efforts in cost control and revenue growth may pay off, thereby boosting market confidence.
- Stock Price Volatility Impact: The 1.9% decline in stock price could affect investor sentiment, particularly ahead of the earnings report, as investors may reassess their strategies, leading to short-term market fluctuations.
See More
U.S.-Iran Conflict Triggers Stock Market Turmoil
- Market Turmoil: The outbreak of the U.S.-Iran conflict led to significant volatility in the U.S. stock market on Monday, impacting investor sentiment and causing instability that could affect short-term investment decisions.
- Nvidia Stock Movement: As a major mover in the market, Nvidia's stock experienced notable fluctuations following the conflict news, reflecting the sensitivity of tech stocks to geopolitical tensions, which may impact its short-term performance.
- Earnings Impact: Credo and MongoDB saw substantial declines after their earnings reports, indicating a strong market reaction to their performance, which could raise concerns among investors regarding the future growth prospects of these companies.
- Investor Sentiment Shift: As the market reacts to the U.S.-Iran situation, investors may reassess their risk appetite, leading to a shift of funds towards safer assets, thereby affecting overall market liquidity.
See More
U.S. Stocks Close Mixed, Berkshire Falls Amid CEO Shift
- Berkshire Stock Decline: Berkshire Hathaway's stock fell by 4.91% to $480.17, with an intraday high of $495.75 and a low of $477.91, reflecting market concerns over new CEO Greg Abel's omission of Bank of America and Chevron in his shareholder letter, potentially signaling a shift in the company's equity strategy.
- AST SpaceMobile Surge: AST SpaceMobile's stock surged 9.76% to $86.92, reaching an intraday high of $86.95 despite reporting a fourth-quarter loss of $0.26 per share, wider than the expected $0.19 loss, but with revenue increasing by $52.39 million year-over-year, indicating optimistic market expectations for its future revenue generation.
- MongoDB Earnings Beat: MongoDB's stock decreased by 1.05% to $325.01, even though it reported fourth-quarter earnings of $1.65 per share, surpassing estimates of $1.45, and revenue of $695.07 million, a 26.8% increase year-over-year; however, its lower-than-expected first-quarter EPS guidance led to a 24% drop in after-hours trading.
- Credo Technology Strong Performance: Credo Technology's stock rose 1.74% to $114.22, with adjusted earnings of $1.07 per share beating expectations, and revenue of $407.01 million marking a 200% year-over-year increase; despite guiding fourth-quarter revenue above analyst estimates, shares fell 8.16% in after-hours trading, reflecting market uncertainty about future performance.
See More
Credo Tech (CRDO) Q3 2026 Earnings Call Transcript
See More
Credo Technology Reports Strong Q3 Earnings, Stock Drops
- Earnings Beat: Credo Technology reported adjusted earnings of $1.07 per share for Q3, surpassing the consensus estimate of $0.95, indicating a robust profitability trend despite a subsequent stock price drop.
- Significant Revenue Growth: The company achieved quarterly revenue of $407.01 million, exceeding the Street estimate of $400.23 million, with over 50% sequential growth and 200% year-over-year growth, showcasing strong market performance.
- Optimistic Outlook: Credo anticipates Q4 revenue between $425 million and $435 million, above the analyst estimate of $422.61 million, reflecting confidence in continued growth.
- Stock Price Volatility: Despite strong earnings, Credo's stock fell 8.16% to $104.90 in extended trading on Monday, indicating market caution regarding the company's future performance.
See More
