Credo Technology Gross Profit vs. Return On Equity

CRDO Stock  USD 69.46  3.20  4.83%   
Based on the key profitability measurements obtained from Credo Technology's financial statements, Credo Technology Group may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in January. Profitability indicators assess Credo Technology's ability to earn profits and add value for shareholders.
 
Gross Profit  
First Reported
2010-12-31
Previous Quarter
119.4 M
Current Value
82.3 M
Quarterly Volatility
24.7 M
 
Credit Downgrade
 
Yuan Drop
 
Covid
As of the 12th of December 2024, Price To Sales Ratio is likely to drop to 9.17. In addition to that, Days Sales Outstanding is likely to drop to 135.73. At this time, Credo Technology's Total Other Income Expense Net is very stable compared to the past year. As of the 12th of December 2024, Income Tax Expense is likely to grow to about 5.9 M, though Accumulated Other Comprehensive Income is likely to grow to (493.1 K).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.60.6189
Sufficiently Down
Slightly volatile
For Credo Technology profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Credo Technology to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Credo Technology Group utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Credo Technology's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Credo Technology Group over time as well as its relative position and ranking within its peers.
  

Credo Technology's Revenue Breakdown by Earning Segment

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Is Semiconductors & Semiconductor Equipment space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Credo Technology. If investors know Credo will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Credo Technology listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.87)
Earnings Share
(0.14)
Revenue Per Share
1.368
Quarterly Revenue Growth
0.702
Return On Assets
(0.04)
The market value of Credo Technology is measured differently than its book value, which is the value of Credo that is recorded on the company's balance sheet. Investors also form their own opinion of Credo Technology's value that differs from its market value or its book value, called intrinsic value, which is Credo Technology's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Credo Technology's market value can be influenced by many factors that don't directly affect Credo Technology's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Credo Technology's value and its price as these two are different measures arrived at by different means. Investors typically determine if Credo Technology is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Credo Technology's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Credo Technology Return On Equity vs. Gross Profit Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Credo Technology's current stock value. Our valuation model uses many indicators to compare Credo Technology value to that of its competitors to determine the firm's financial worth.
Credo Technology Group is rated below average in gross profit category among its peers. It is rated below average in return on equity category among its peers . At this time, Credo Technology's Gross Profit is very stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Credo Technology's earnings, one of the primary drivers of an investment's value.

Credo Technology's Earnings Breakdown by Geography

Credo Return On Equity vs. Gross Profit

Gross Profit is the most basic measure of business operational efficiency. It is simply the difference between sales revenue and the cost associated with making a product or providing a service. It is calculated before deducting administrative expenses, taxes, and interest payments.

Credo Technology

Gross Profit

 = 

Revenue

-

Cost of Revenue

 = 
65.77 M
Gross Profit varies significantly from one sector to another and tells an investor how much money a business would have made if it didn't have to pay any overhead expenses such as salary, taxes, or rent.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Credo Technology

Return On Equity

 = 

Net Income

Total Equity

 = 
-0.0582
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.

Credo Return On Equity Comparison

Credo Technology is currently under evaluation in return on equity category among its peers.

Credo Technology Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Credo Technology, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Credo Technology will eventually generate negative long term returns. The profitability progress is the general direction of Credo Technology's change in net profit over the period of time. It can combine multiple indicators of Credo Technology, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-519 K-493.1 K
Operating Income-36.3 M-34.5 M
Net Loss-28.4 M-29.8 M
Income Before Tax-22.7 M-23.9 M
Total Other Income Expense Net13.5 M14.2 M
Net Loss-19 M-20 M
Net Loss-28.4 M-29.8 M
Income Tax Expense5.6 M5.9 M
Non Operating Income Net Other3.8 MM
Change To Netincome36.4 M38.2 M
Net Loss(0.18)(0.25)
Income Quality(1.15) 1.39 
Net Income Per E B T 1.25  1.00 

Credo Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Credo Technology. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Credo Technology position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Credo Technology's important profitability drivers and their relationship over time.

Use Credo Technology in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Credo Technology position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Credo Technology will appreciate offsetting losses from the drop in the long position's value.

Credo Technology Pair Trading

Credo Technology Group Pair Trading Analysis

The ability to find closely correlated positions to Credo Technology could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Credo Technology when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Credo Technology - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Credo Technology Group to buy it.
The correlation of Credo Technology is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Credo Technology moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Credo Technology moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Credo Technology can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Credo Technology position

In addition to having Credo Technology in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Run Computers Thematic Idea Now

Computers
Computers Theme
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Computers theme has 61 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Computers Theme or any other thematic opportunities.
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When determining whether Credo Technology offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Credo Technology's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Credo Technology Group Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Credo Technology Group Stock:
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You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
To fully project Credo Technology's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Credo Technology at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Credo Technology's income statement, its balance sheet, and the statement of cash flows.
Potential Credo Technology investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Credo Technology investors may work on each financial statement separately, they are all related. The changes in Credo Technology's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Credo Technology's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.