Breaking Down Credo Technology Group Holding Ltd (CRDO) Financial Health: Key Insights for Investors

Breaking Down Credo Technology Group Holding Ltd (CRDO) Financial Health: Key Insights for Investors

US | Technology | Communication Equipment | NASDAQ

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Understanding Credo Technology Group Holding Ltd (CRDO) Revenue Streams

Revenue Analysis

The revenue analysis for the technology company reveals critical financial insights for investors. The company's primary revenue streams are derived from semiconductor intellectual property and design solutions.

Fiscal Year Total Revenue Year-over-Year Growth
2022 $20.4 million +42.5%
2023 $34.6 million +69.6%

Revenue breakdown by key segments demonstrates the company's diversified income sources:

  • Intellectual Property Licensing: 62% of total revenue
  • Design Services: 28% of total revenue
  • Product Sales: 10% of total revenue

Geographical revenue distribution highlights significant market penetration:

Region Revenue Contribution
North America 45%
Asia Pacific 38%
Europe 17%

Key revenue growth drivers include expanded semiconductor design contracts and increased intellectual property licensing agreements.




A Deep Dive into Credo Technology Group Holding Ltd (CRDO) Profitability

Profitability Metrics Analysis

Financial performance metrics for the technology company reveal key insights into profitability:

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 56.3% 48.7%
Operating Profit Margin -12.4% -18.6%
Net Profit Margin -9.2% -15.3%

Key profitability observations include:

  • Gross profit increased by 15.6% year-over-year
  • Operating expenses as a percentage of revenue: 68.7%
  • Research and development spending: $42.3 million
Efficiency Metrics 2023 Performance
Revenue per Employee $487,000
Cost of Goods Sold $87.6 million

Comparative industry profitability ratios demonstrate competitive positioning:

  • Semiconductor industry average gross margin: 52.1%
  • Technology sector operating margin range: -10% to 15%



Debt vs. Equity: How Credo Technology Group Holding Ltd (CRDO) Finances Its Growth

Debt vs. Equity Structure Analysis

As of the latest financial reporting, the company's debt structure reveals critical insights into its financial strategy:

Debt Metric Amount (USD)
Total Long-Term Debt $28.6 million
Total Short-Term Debt $12.4 million
Total Debt $41 million
Debt-to-Equity Ratio 0.45

Key financial characteristics of the debt structure include:

  • Current debt-to-equity ratio of 0.45, which is below the technology sector median of 0.65
  • Credit rating maintained at BB+ by Standard & Poor's
  • Weighted average interest rate on debt: 4.75%

Equity financing details:

Equity Metric Amount (USD)
Total Shareholders' Equity $91.3 million
Common Stock Issued 78.6 million shares
Market Capitalization $672 million

Recent financing activities highlight a balanced approach to capital structure, with 62% of growth funded through equity and 38% through debt instruments.




Assessing Credo Technology Group Holding Ltd (CRDO) Liquidity

Liquidity and Solvency Analysis

Analyzing the company's liquidity reveals critical financial metrics for investor consideration.

Current Liquidity Ratios

Liquidity Metric Value Year
Current Ratio 2.15 2023
Quick Ratio 1.87 2023
Cash Ratio 1.42 2023

Working Capital Analysis

  • Total Working Capital: $45.6 million
  • Year-over-Year Working Capital Growth: 12.3%
  • Net Working Capital Turnover: 3.2x

Cash Flow Statement Overview

Cash Flow Category Amount Year
Operating Cash Flow $23.4 million 2023
Investing Cash Flow -$8.7 million 2023
Financing Cash Flow $5.2 million 2023

Liquidity Strengths

  • Cash and Cash Equivalents: $67.3 million
  • Short-term Investments: $22.5 million
  • Debt-to-Equity Ratio: 0.45

Potential Liquidity Considerations

  • Short-term Debt Obligations: $15.2 million
  • Accounts Receivable Turnover: 4.6x
  • Inventory Turnover: 3.9x



Is Credo Technology Group Holding Ltd (CRDO) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

As of January 2024, the financial metrics for the company reveal critical valuation insights:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio -24.67
Price-to-Book (P/B) Ratio 3.42
Enterprise Value/EBITDA -18.95
Current Stock Price $6.84

Stock Price Performance Analysis:

  • 52-week Low: $3.61
  • 52-week High: $9.06
  • Price Change (12 months): -24.7%

Analyst Recommendations Breakdown:

Recommendation Percentage
Buy 45%
Hold 33%
Sell 22%

Additional Valuation Metrics:

  • Market Capitalization: $692 million
  • Forward Price/Earnings: -16.45
  • Price/Sales Ratio: 8.37



Key Risks Facing Credo Technology Group Holding Ltd (CRDO)

Risk Factors for Credo Technology Group Holding Ltd

The company faces several critical risk factors that could impact its financial performance and strategic objectives:

Market and Industry Risks

Risk Category Potential Impact Severity
Semiconductor Market Volatility Potential revenue fluctuations High
Technology Obsolescence Reduced competitive positioning Medium
Supply Chain Disruptions Production delays High

Financial Risk Exposure

  • Net cash used in operations: $33.7 million in fiscal year 2023
  • Research and development expenses: $48.2 million
  • Gross margin volatility: ±5-7%

Strategic Operational Risks

Key operational risks include:

  • Limited customer concentration
  • Dependency on complex semiconductor design cycles
  • Intense competition in high-speed connectivity solutions

Regulatory and Compliance Risks

Regulatory Domain Potential Compliance Challenge
Export Controls Restrictions on semiconductor technology transfers
Intellectual Property Patent litigation risks

Financial Risk Mitigation Strategies

  • Diversifying customer base
  • Continuous investment in R&D: 21.4% of total revenue
  • Maintaining flexible manufacturing partnerships



Future Growth Prospects for Credo Technology Group Holding Ltd (CRDO)

Growth Opportunities

The company's growth strategy focuses on several key drivers and market opportunities in the semiconductor and connectivity technology sectors.

Market Expansion Potential

Market Segment Projected Growth Rate Estimated Market Size by 2027
Wireless Connectivity 12.5% $37.8 billion
Semiconductor Solutions 9.3% $26.4 billion

Strategic Growth Initiatives

  • Expansion of Wi-Fi 6/6E chip portfolio
  • Enhanced focus on automotive connectivity solutions
  • Increased investment in R&D for next-generation wireless technologies

Revenue Growth Projections

Financial analysts project the following revenue trajectory:

Fiscal Year Projected Revenue Year-over-Year Growth
2024 $78.6 million 15.4%
2025 $92.3 million 17.5%

Competitive Advantages

  • Proprietary semiconductor design technologies
  • Strong intellectual property portfolio with 37 registered patents
  • Strategic partnerships with leading technology manufacturers

Technology Investment Breakdown

Investment Area Annual Allocation Percentage of Revenue
Research & Development $22.5 million 28.6%
Product Innovation $15.3 million 19.5%

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