When Credo’s biggest client cuts its demand forecasts, the stock price drops by about 50 percent.
On Wednesday, the price of Credo Technology’s stock dropped by almost half because it was expected that demand from its biggest customer would go down, which hurt the company’s expected revenue.
According to a filing with the Securities and Exchange Commission, the firm reported that its major customer lowered its demand projection for reasons unrelated to Credo’s performance. In the filling, Credo did not include the customer’s name.
The company expects the upcoming quarter’s revenue to be between $30 million and $32 million, citing the decline in demand and “macro challenges.” This is less than the $58.3 million consensus expectation of FactSet-polled analysts.
Comparing the full fiscal year of 2023 to the full fiscal year of 2024, the company expects revenue to be flat. However, management has indicated that sequential growth is anticipated in 2024, stating that the “long-term financial strategy remains unaltered.” The business also said that it is managing its operating costs to help it grow and make money.
- Advertisement -
The stock entered negative territory for the year as a result of Wednesday’s dramatic decline, trading about 22% lower than at the start of 2023. This is a reversal from the stock’s outperformance in 2022, the company’s first year as a publicly traded entity, when shares ended the year up almost 28%.
Credo’s shares were last trading down 46.3% on Wednesday.