Credo Technology Group Holding Ltd (NASDAQ:CRDO) reported that its Chief Operating Officer, Lam Yat Tung, has sold a total of 10,000 ordinary shares, valued at over $300,000. The transactions, which took place on July 11, 2024, were executed within a price range of $30.5922 to $31.18, according to a recent filing.
The sales were carried out under a prearranged 10b5-1 trading plan, a tool that allows insiders to sell shares at predetermined times to avoid accusations of insider trading. The weighted average sale prices were reported as $30.5922 for the larger block of 9,500 shares and $31.18 for the remaining 500 shares. The total proceeds from the sales amounted to $306,215.
Following these transactions, Lam Yat Tung's direct holdings in the company have decreased, though he still retains a significant stake of 3,117,777 ordinary shares. Additionally, the COO has indirect holdings through entities named Zhan BVI Co Ltd and Chung BVI Co Ltd, which own 1,270,000 and 720,000 shares respectively. However, Lam Yat Tung has disclaimed beneficial ownership of these shares, except to the extent of any pecuniary interest therein.
In a separate transaction on July 15, which is not included in the total sale value, Lam Yat Tung gifted 300,000 ordinary shares to the U.S. Legacy Income Trust, a charitable organization. This gift did not affect the market as the shares were not sold and the price per share was $0.0.
Investors often monitor insider transactions as they can provide insights into an executive's view of the company's stock value and future performance. However, it's important to note that these transactions do not necessarily indicate a lack of confidence in the company but could be part of personal financial planning or diversification strategies.
In other recent news, Credo Technology Group Holding Ltd. has been the subject of significant attention from analysts and investors alike. The company reported record revenues for the fourth quarter of fiscal year 2024, primarily driven by its artificial intelligence (AI) applications. Credo's Q4 revenue reached $60.8 million, marking an 89% increase year-over-year, and the company's IP business also saw substantial growth, generating $16.6 million in Q4, up 193% year-over-year.
Analyst firm TD Cowen recently upgraded Credo's stock from Hold to Buy and raised the price target to $40 from $35. The firm cited Credo's unique low-power product offerings and potential growth drivers in various connectivity markets as reasons for the upgrade. TD Cowen also expressed confidence in Credo's strategic position in the industry, referring to the company as their top Small to Mid-cap (Smidcap) pick for the year 2024.
In the near future, Credo anticipates a continued expansion in AI revenue and a strategic focus on customer-specific solutions. However, Q1 revenue for fiscal year '25 is forecasted to be between $58 million and $61 million, indicating a 2% sequential decrease. Despite this, the company remains well-capitalized with $410.0 million in cash and equivalents, and its ongoing development of high-speed data transmission technologies continues to attract positive analyst attention.
InvestingPro Insights
As Credo Technology Group Holding Ltd (NASDAQ:CRDO) makes headlines with insider trading activity, investors looking for deeper insights can turn to InvestingPro for a comprehensive analysis. With a market capitalization of $5.1 billion and a notable gross profit margin of 61.89% for the last twelve months as of Q4 2024, CRDO demonstrates a solid financial footing. The company's gross profit stands at $119.43 million, underscoring its ability to maintain profitability in its operations. Despite a negative P/E ratio of -171.39, the company's financial health is buoyed by a strong return over the last year, with a 1 Year Price Total Return of 82.66%.
InvestingPro Tips suggest that while CRDO is not currently profitable, with net income expected to grow this year, analysts predict the company will reach profitability. Additionally, the company's stock price movements have been quite volatile, but CRDO has maintained a high return over the last three months, with a 58.8% 3 Month Price Total Return. This could indicate a bullish trend for investors who are considering the timing of their investments.
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