Shares of Credo Technology (NASDAQ: CRDO), provider of network solutions for data infrastructure and licensing, have only fallen mercifully (-3%). It’s worth noting that the dubious semiconductor company only recently went public in January 2022, but its shares have remained resilient due to strong 90% revenue growth. As a provider of fast connectivity solutions for the data infrastructure market, there is great optimism in the apparently recession-proof data infrastructure segment. However, the technological bear market has led investors to prefer value and profit over growth and momentum. The company was able to navigate its supply chain because one of its partners in China was closed during the COVID lockdowns, rendering it unable to meet customer demand in the fiscal quarter of 2022. Despite the challenge, many of its larger customers have confirmed a 52-week backlog. The company continues to see increasing demand for its solutions from optical module manufacturers, hyperscalers, to network OEMs and ODMs. Credo raised its forward revenue forecast and expects to nearly double its revenues north of $200 million in fiscal 2023. Cautious investors looking for growth in the data infrastructure segment can look forward to opportunistic pullbacks in Credo Technology shares.
Q4 Fiscal 2022 Profit Release
On June 1, 2022, Credo reported its fiscal results for the fourth quarter of 2022 for the quarter ended April 2022. The company reported earnings per share (EPS) of $0.02 versus consensus analysts for breakeven, a gain from $0.02. Revenues were up 90% year-over-year (YoY) to $37.53 million, better than analysts’ estimates of $36.35 million. GAAP gross margins were 63.3% and operating expenses were $30.1 million. GAAP net loss was (-$5.4 million) while non-GAAP net income was $2.8 million. The company sold an additional three million shares of common stock in connection with its IPO for $28.1 million in proceeds. The company ended the quarter with $259.3 million in cash. Chuck Bill Brennan, CEO of Credo: “Fiscal 2022 was a year of tremendous achievement for Credo. Our highlights included completing our IPO in January 2022 and hitting record revenues of $106.5 million, an increase of more than 80% year-over-year record results in the most recent quarter despite the complexity we faced During our fiscal fourth quarter, we posted revenue of $37.5 million, up 90.0% year over year We had growth in every part of our business in fiscal 2022, and we expect the same in fiscal 2023.”
Credo issued Upside fiscal Q1 2023 revenue forecasts for $43.5 million to $47.5 million versus $42.85 million consensus analyst estimates. GAAP gross margin is expected to be between 58.5% and 60.5%. GAAP operating expenses are expected to be between $27.5 million and $29.5 million.
Takeaway for conference calls
CEO Brennan said he was optimistic about continuing strong growth in fiscal 2023. The IPO on January 27, 2022 raised enough money to support investments to improve its products. He rated a successful fiscal 2022 with record revenue of $106.5 million, an 80% year-over-year increase. Product growth increased by 120% compared to last year. Record sales growth across all of its Ethernet lines, including Optical DSPs, Line Card PHYs, AECs and SerDes Chiplets, as well as its IP licensing business. The company stands out for its architectural approach that optimizes analog and DSP architectures to deliver low power and small mold sizes. The development and wafer cost benefits are derived from the N minus one process mode approach. This creates a cumulative effect of value across the range of connectivity applications. The total addressable market (TAM) in the high-end Ethernet connectivity market exceeds $5 billion, but the new emerging solutions for the USD and PCle segment will add an incremental $3 billion to the TAM. He concluded: “Fortunately, customer demand for our solutions continues to look very robust. We had growth in every area of our business in fiscal 2022 and we expect the same in fiscal 2023. Given the breadth of our solutions, our technical innovation, our operating capabilities, favorable market trends and ultimately strong customer demand, we look forward to another record year in fiscal 2023, in which we expect to achieve at least $200 million in revenue, representing growth of more than 88%.”
CRDO Opportunistic Withdrawal Levels
Using the gun charts on the weekly and daily frames provides an accurate picture of the landscape for CRDO stocks. The weekly gun chart peaked near the Fibonacci (fib) level of $17.92 before falling in half to $8.61 before rallying. The weekly gun chart’s upward trend was given a boost as stocks abruptly fell back below the 5-period moving average (MA) at $12.38 and 15-period MA at $11.93. Weekly stochastics are still rising, but begin to stagnate below the 50 band. The daily market structure low (MSL) buy was triggered on the $10.43 breakout. The daily gun chart is trending down with a 5-period MA falling at $11.65, testing the 50-period daily MA at $11.28 with a 15-period MA falling at $12.24. The daily lower Bollinger Bands (BBs) are at $10.81 and the higher BBs are at $10.81. The daily stochastic caused a mini inverse pup oscillation down through the 20 band. Cautious investors can look for opportunistic pullback levels at the daily MSL trigger of $10.43, $9.67 fib, $9.12 fib, $8.61, $8.05, $7.35 fib and the fib level of $6.40. Upward trajectories range from $12.47 fib to $15.20 fib level.
This post Credo Technology stock recovers was original published at “https://www.entrepreneur.com/article/431031”