Credo Technology shares fall as margin pressure overshadows earnings beat (CRDO:NASDAQ)
Credo Technology shares fell between 8% and 21% following its fiscal first-quarter 2027 report, despite beating revenue and earnings estimates. The company reported revenue of $479 million, a 115% increase from a year earlier, and adjusted earnings of $1.20 per share. However, investors reacted negatively to shrinking margins and rising operating expenses. GAAP gross margin dropped to 64.5% from 68.2% in the prior quarter, while the GAAP operating margin narrowed to 25.2%. J.P. Morgan and BofA responded to the results and soft guidance by cutting price targets.
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- ✓ Credo Technology reported fiscal Q1 2027 revenue of $479 million.
- ✓ Revenue increased 115% from a year earlier.
- ✓ Adjusted earnings per share were $1.20, beating the $1.17 consensus.
- ✓ GAAP gross margin fell to 64.5% from 68.2% in the prior quarter.
What changed
Credo Technology released fiscal Q1 2027 results showing record revenue but declining profitability margins.
Live updates
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Credo Technology shares plunge despite Q1 2027 earnings beat
Credo Technology shares fell between 8% and 21% following its fiscal first-quarter 2027 report, despite beating revenue and earnings estimates. The company reported revenue of $479 million, a 115% increase from a year earlier, and adjusted earnings of $1.20 per share. However, investors reacted negatively to shrinking margins and rising operating expenses. GAAP gross margin dropped to 64.5% from 68.2% in the prior quarter, while the GAAP operating margin narrowed to 25.2%. J.P. Morgan and BofA responded to the results and soft guidance by cutting price targets.
Why it matters
The stock had gained 43.6% this year through Tuesday's close, making it susceptible to profit-taking. This quarter marked the company's seventh consecutive period of triple-digit annual growth. Analysts remain divided on future value, with some seeing upside of 28.17% to 64%.
What is confirmed
- Credo Technology reported fiscal Q1 2027 revenue of $479 million.
- Revenue increased 115% from a year earlier.
- Adjusted earnings per share were $1.20, beating the $1.17 consensus.
- GAAP gross margin fell to 64.5% from 68.2% in the prior quarter.
- The GAAP operating margin narrowed to 25.2% from 35.7% in the previous quarter.
- Credo shares dropped approximately 20% on September 2.
Still unconfirmed
- The MACD technical indicator shows a sell signal at -13.332.
- GF Value sees a 64% upside for the stock.
- Wall Street analysts believe the stock could rally 28.17%.
What to watch next
- Updates to price targets from J.P. Morgan and BofA
- Company guidance for the remainder of fiscal 2027
- Quarterly margin recovery data
confidence 95%Sources used for this update (10)
- Yahoo Finance — Earnings To Watch: Credo Technology Group Holding Ltd (CRDO) Q1 2027 -- GF Value Sees 64% Upside
- Seeking Alpha — Credo Technology shares fall as margin pressure overshadows earnings beat (CRDO:NASDAQ)
- tradingview.com — Credo Technology Group Reports Q1 FY2027 Revenue $479.0M, GAAP Net Income $129.4M
- Zacks Investment Research — Wall Street Analysts Believe Credo Technology Group (CRDO) Could Rally 28.17%: Here's is How to Trade
- Moomoo — When 115% Growth Isn't Enough: Why CRDO Crashed After Earnings
- www.tradingkey.com — Credo Technology Group Holding Ltd Stock (CRDO) Moved Down by 19.96% on Sep 2: What Investors Need To Know
- blockonomi.com — Credo Technology (CRDO) Stock Plunges 8% Despite Beating Q1 Earnings Expectations
- blockonomi.com — Credo Technology (CRDO) Stock Plunges 21% Despite Earnings Beat on Weak Guidance
- www.aol.com — Why Is Credo Technology Stock Sinking Wednesday?
- finance.biggo.com — Credo Shares Plunge 20% Despite Revenue More Than Doubling as Profitability Concerns Mount
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