Credo Technology’s CTO sells shares worth over $1.59 million By Investing.com

Credo Technology Group Holding Ltd’s (NASDAQ:) Chief Technology Officer, Cheng Chi Fung, has recently sold 55,000 shares of the company’s stock. The transaction, which took place on June 13, 2024, was executed at a weighted average price of $28.9878 per share, resulting in a total value of approximately $1.59 million.

This sale was carried out according to a prearranged trading plan under Rule 10b5-1, which allows company insiders to set up a predetermined plan for buying or selling stocks at a future date. This plan was adopted by the Cheng Huang Family Trust on September 7, 2023. The shares sold are part of the ordinary shares held by the Cheng Huang Family Trust. Cheng, along with his spouse, are trustees of the trust, and along with their children, are the beneficiaries.

The sale was executed in multiple trades with prices ranging from $28.66 to $29.51, as detailed in the footnotes of the SEC filing. Cheng Chi Fung has undertaken to provide full information regarding the number of shares sold and the specific prices if requested by the SEC staff, the issuer, or a security holder of the issuer.

Following the sale, the Cheng Huang Family Trust still holds a significant number of shares in the company, amounting to 9,553,602 ordinary shares. Cheng Chi Fung has stated that he disclaims beneficial ownership of these shares, except to the extent of his and his spouse’s pecuniary interest.

Investors often monitor insider transactions as they may provide insights into the company’s performance and insiders’ perspectives on the stock’s value. However, sales under Rule 10b5-1 plans are often planned well in advance and may not necessarily reflect a change in an insider’s view of the company’s prospects.

The filing was signed by Katherine E. Schuelke, attorney-in-fact, on behalf of Cheng Chi Fung on June 17, 2024.

In other recent news, Credo, a high-speed connectivity solutions provider, reported record-breaking revenues for the fourth quarter of fiscal year 2024, largely propelled by the robust demand for its artificial intelligence (AI) applications. The company marked significant year-over-year revenue growth, with Q4 revenue reaching $60.8 million, an 89% increase compared to the previous year. AI deployments were a key growth driver, contributing to approximately three-quarters of Q4 revenue.

Credo’s outlook for fiscal year 2025 is positive, with an expectation of continued expansion in AI revenue and a strategic focus on customer-specific solutions. The company projects AI revenue to double from Q4 of fiscal year ’24 to Q4 of fiscal year ’25.

In other developments, Credo remains well-capitalized, holding $410.0 million in cash and equivalents. The company’s IP business generated $16.6 million in Q4, marking a 193% year-over-year increase. Despite a forecasted 2% sequential decrease for Q1 revenue in fiscal year ’25, Credo’s growth trajectory remains strong, backed by its robust financial health and growing demand for AI-driven connectivity solutions.

InvestingPro Insights

In light of the recent insider transaction by Credo Technology Group Holding Ltd’s (NASDAQ:CRDO) Chief Technology Officer, Cheng Chi Fung, investors may find additional context from real-time data and InvestingPro Tips valuable. Although insider sales can be pre-planned, understanding the company’s financial health and market performance can offer a broader perspective.

InvestingPro Data shows that CRDO has a market capitalization of $4.72 billion, with a high Price / Book ratio of 8.64 as of the last twelve months ending Q4 2024. This suggests that the stock is being valued substantially in relation to its net assets. Moreover, the company has experienced a significant quarterly revenue growth of 89.42% in Q4 2024, reflecting a potential uptick in business activities and market demand for its offerings.

Despite a negative P/E ratio, indicating that the company has not been profitable over the last twelve months, the gross profit margin remains strong at 61.89%. This highlights efficient cost management in the production of goods or services. Additionally, the stock has seen a remarkable year-to-date price total return of 48.33%, with a 1-month price total return of 52.89%, signaling strong recent performance in the market.

Two key InvestingPro Tips for CRDO include the fact that analysts have revised their earnings upwards for the upcoming period, suggesting optimism about the company’s future financial performance. Additionally, the company holds more cash than debt on its balance sheet, providing it with financial flexibility and potentially less risk for investors.

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