Why Credo Technology Stock Plunged 20% Today
Credo Technology crushed its earnings estimates. So why did the stock drop 20%?
Overview
Credo Technology (NASDAQ: CRDO) is having a difficult Wednesday. The company reported Q1 2027 results on Tuesday evening, smashing Wall Street's estimates and offering rosy guidance for the next quarter. But the stock was priced for perfection, and Credo gave the bears enough to feast on. The stock closed Wednesday's trading 20% lower.
Let's start with the headline figures. Revenue more than doubled, with a 115% year-over-year jump to $479 million. Adjusted earnings landed at $1.20 per diluted share, up 131% from $0.52 per share in the year-ago period. Credo's active electric cables (AECs) are shipping to five hyperscalers, and the newer optical business is catching up fast. Q2 guidance pointed to roughly $530 million of top-line revenue, up from $268 million in last year's second quarter and well above the current analyst consensus at $517 million.
Details
So it's a classic beat-and-raise report, but there's one uncomfortable wrinkle. Credo's business is incredibly concentrated on a handful of customers. The three largest clients accounted for 74% of total revenues.
Source
Originally published at www.fool.com.