Credo stock sinks after first-quarter report as gross margin dips and valuation weighs

Credo shares fell sharply in the week after the fiscal first-quarter report, which beat estimates on revenue and adjusted EPS. Investors focused on the lower GAAP gross margin, the guidance for a lower GAAP margin next quarter, and a large rise in stock-based compensation. Per S&P Global Market Intelligence data, the stock fell 29.5% over that trading week.

• Shares fell 29.5% over the trading week, per S&P Global Market Intelligence
• GAAP gross margin 64.5%, down from about 68% in the prior quarter
• Stock-based compensation rose sharply, which investors disliked
• Stock traded at about 18 times the next fiscal year's revenue estimate of $2.49 billion before the drop