In a recent transaction, Tan Lip Bu, Director of Credo Technology Group Holding Ltd (NASDAQ:CRDO), sold a significant amount of company stock totaling approximately $692,331. The sales, executed over a span of three days, were conducted at prices ranging between $31.3348 and $31.5069 per share.
On July 10, 2024, Tan disposed of 6,110 ordinary shares at a weighted average price of $31.3348, followed by a sale of 3,053 shares on July 11 at a flat rate of $31.50. The largest transaction occurred on July 12, where 12,845 shares were sold at a weighted average price of $31.5069. Each of these transactions was carried out in multiple trades, and the prices reported are based on the weighted average sale price for those dates.
The sales made by Tan Lip Bu were indirect, as the shares were associated with Walden Technology Ventures Investments II, L.P., where Tan serves as the Managing Director. Following these transactions, Tan's indirectly held shares in Credo Technology Group Holding Ltd amounted to 3,109,163 shares. It should be noted that Tan disclaims beneficial ownership of these shares except to the extent of any pecuniary interest therein.
In addition to these, Tan also has indirect interests in other holdings, including shares in the Lip-Bu Tan and Ysa Loo Trust and A&E Investment LLC, which are family trusts and entities for which Tan is a joint trustee.
Investors and the market often monitor such insider transactions to gauge the confidence level of company executives and directors in the firm's prospects. The sales by Tan Lip Bu represent a substantial divestment, but the reasons behind the decision remain undisclosed in the filing. The transactions were reported in a Form 4 document filed with the Securities and Exchange Commission.
In other recent news, Credo Technology Group Holding Ltd. has been making headlines with its recent financial developments and positive outlook from analysts. The company reported record revenues for the fourth quarter of fiscal year 2024, primarily driven by its artificial intelligence (AI) applications. Notably, Credo's Q4 revenue reached a record $60.8 million, marking an 89% increase year-over-year.
In addition, the company's stock rating was upgraded from Hold to Buy by TD Cowen, which also raised the price target for Credo's shares to $35.00. This upgrade was based on the potential of Credo's technology and the anticipated turning point in its business model beginning in the second half of fiscal year 2025.
Furthermore, Credo's artificial intelligence (AI) applications were the key growth driver, contributing to approximately three-quarters of its Q4 revenue. The company expects AI revenue to double from Q4 fiscal year '24 to Q4 fiscal year '25. However, Q1 revenue for fiscal year '25 is forecasted to be between $58 million and $61 million. These recent developments paint an optimistic picture of Credo's future performance.
InvestingPro Insights
The recent insider selling activity by Tan Lip Bu at Credo Technology Group Holding Ltd (NASDAQ:CRDO) has caught the attention of investors trying to understand the implications for the stock. In light of this, certain metrics and insights from InvestingPro can provide a broader context to the company's financial health and future prospects.
From a financial standpoint, Credo Technology Group is currently trading near its 52-week high, with a price that is 94.69% of this peak, reflecting a strong price performance over the last year, with an impressive one-year price total return of 81.64%. This robust return could be a factor influencing insider decisions to sell shares.
Looking at the company’s fundamentals, Credo Technology Group has a notable gross profit margin of 61.89% for the last twelve months as of Q4 2024, which is an InvestingPro Tip indicating an impressive ability to retain earnings from sales after accounting for the cost of goods sold. However, it's also worth noting that the company is trading at a high Price / Book multiple of 9.49, which suggests a premium valuation relative to the company's book value.
InvestingPro Tips highlight that Credo Technology Group holds more cash than debt on its balance sheet and analysts have revised their earnings upwards for the upcoming period, suggesting optimism about the company’s earnings potential. These factors may provide some assurance to investors amidst the insider selling activity.
For investors interested in a deeper dive into Credo Technology Group's financials and future outlook, InvestingPro offers additional insights. There are 16 more InvestingPro Tips available for CRDO, which can be accessed at https://www.investing.com/pro/CRDO. To enhance your investment analysis, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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