SAN JOSE, CA – Credo Technology Group Holding Ltd (NASDAQ:CRDO) reported that its Chief Technology Officer, Cheng Chi Fung, has sold a significant portion of his holdings in the company. According to recent filings, the CTO sold shares in a series of transactions that totaled over $1.7 million.
The transactions, which took place on October 3rd, involved the sale of 33,687 shares at a weighted average price of $30.7114, 17,865 shares at an average of $31.5312, and 3,448 shares at an average of $32.2214. These sales were executed under a pre-arranged Rule 10b5-1 trading plan, which allows insiders to sell shares at predetermined times to avoid accusations of insider trading.
Following the sales, Cheng Chi Fung's indirect holdings through the Cheng Huang Family Trust remain substantial, with the trust still holding 8,948,602 shares. It's worth noting that the CTO and his spouse are trustees of the Cheng Huang Family Trust, and along with their children, are the beneficiaries. However, Cheng Chi Fung has disclaimed beneficial ownership of these shares, except to the extent of his and his spouse's pecuniary interest.
Additionally, on October 4th, a smaller transaction occurred where 2,460 shares were withheld by Credo Technology Group to satisfy tax withholding obligations tied to the vesting of restricted stock units (RSUs), valued at a price of $32.57 per share, totaling $80,122.
These filings provide investors with a glimpse into the trading activities of one of Credo Technology's key executives and offer insights into insider sentiment. As always, investors are encouraged to consider the context of such sales when making investment decisions.
In other recent news, Credo Technology Group Holding Ltd. has reported a strong start to fiscal 2025, with Q1 revenues hitting $59.7 million and a non-GAAP gross margin of 62.9%. This represents a substantial 70% year-over-year revenue increase, largely attributed to the expansion of AI deployments. TD Cowen reaffirmed its Buy rating on Credo Technology, highlighting the positive momentum across the company's product portfolio and anticipating a revenue increase in the second half of fiscal year 2025.
Market analysts at Craig-Hallum and Needham have increased their price targets for Credo Technology to $38.00 and $33.00 respectively, reflecting the company's robust financial performance and promising future guidance. The analysts' optimism is fueled by expectations of increased sales across a broader range of Advanced Ethernet Controllers and the growth of optical Digital Signal Processor sales.
Credo Technology has also announced plans to enter the 64 gig PAM4 PCIe Gen 6 market later this year, aiming to capitalize on the growing demand for higher bandwidth driven by AI applications. This move is part of the company's strategic focus on AECs, Optical DSP, and Line Card PHY businesses, which are anticipated to be key growth drivers. These recent developments underline Credo Technology's commitment to growth and innovation in the face of evolving AI demands.
InvestingPro Insights
To provide additional context to Credo Technology Group's recent insider sales, let's examine some key financial metrics and insights from InvestingPro.
Credo Technology Group (NASDAQ:CRDO) currently boasts a market capitalization of $5.41 billion, reflecting significant investor interest in the company. This valuation comes despite the fact that the company is not currently profitable, as indicated by its negative P/E ratio of -147.94. However, InvestingPro Tips suggest that analysts anticipate sales growth and expect the company to become profitable this year, which could explain the high valuation multiples.
The company's revenue for the last twelve months stood at $217.59 million, with an impressive revenue growth of 70.15% in the most recent quarter. This aligns with the InvestingPro Tip highlighting Credo's strong return over the last month, with a 33.47% price increase over the past 30 days.
Credo's financial health appears solid, with InvestingPro Tips indicating that the company holds more cash than debt on its balance sheet and that its liquid assets exceed short-term obligations. This strong financial position may provide the company with flexibility for future growth initiatives.
It's worth noting that Credo's stock has shown high volatility, which is consistent with the CTO's recent large share sales. The stock has delivered a remarkable 88.64% return over the past year, and currently trades at 88.45% of its 52-week high.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Credo Technology Group, providing a deeper understanding of the company's financial position and market performance.
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