From Yahoo Finance · · 1m
Credo's Profit Drop Signals Cash Shortfall
Credo's $236M profit came with just $83M cash flow, sparking a 42% stock drop.
In brief
Credo's $236M profit came with just $83M cash flow, sparking a 42% stock drop. Credo Technology Group reported $236 million adjusted profit but only $83 million free cash flow, causing a 42% stock decline amid analyst concerns about inventory buildup and customer concentration. Originally reported by Yahoo Finance.
Credo's Profit
Credo reported $236.3 million adjusted profit for fiscal Q1.
“Credo reported $236.3 million in adjusted profit”
Cash Flow Drop
Free cash flow fell to $82.9 million from $90.2 million operating cash flow.
“Free cash flow, defined as operating cash flow minus $7.3 million in capital expenditures, was $82.9 million”
Stock Decline
Shares dropped 42.14% to $150.39 in one month.
“Shares last traded at $150.39, down 42.14% over the past month”
Analyst Ratings
18 of 19 analysts maintain Buy ratings with $281.47 consensus target.
“18 of 19 analysts maintain Buy ratings with a $281.47 consensus target”
Customer Concentration
Top two customers represent 33% and 28% of revenue.
“Top two customers represent 33% and 28% of revenue”
Inventory Build
Inventory increased $62.2 million, using $61.54 million cash.
“Ending inventory was $313.1 million, up $62.2 million sequentially”
Cash Flow Impact
Working capital changes reduced cash flow by $92 million.
“Cash flow from operations in the first quarter was $90.2 million, down $92 million sequentially”
Q2 Guidance
Revenue expected at $525 million to $535 million.
“Fiscal Q2 revenue guidance of $525 million to $535 million”
Bull Case
AI ramp and inventory conversion could boost cash flow.
“The bull case is that the AI infrastructure ramp is real”
The short version
Credo Technology Group reported $236 million adjusted profit but only $83 million free cash flow, causing a 42% stock decline amid analyst concerns about inventory buildup and customer concentration.
