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Kalkine IPO Report

Is this the right time to exit from Credo Technology Group Holding Ltd?

Feb 10, 2022

Company Overview

Credo Technology Group Holding Ltd is a pioneer in providing secure, high-speed connectivity solutions, enhancing power and cost efficiency as data rates and associated bandwidth requirements rise rapidly across the data infrastructure sector.

Initial Public Offering

The company launched its IPO on NASDAQ on January 27, 2022, under the ticker CRDO and had sold approximately 20 million ordinary shares at $10/share. We had covered this IPO in our ‘Kalkine IPO Report’ on January 26, 2022 and assigned a “Neutral” rating given its presence in high-speed connectivity solutions and the associated risks.

 Daily Price Chart (as on February 09, 2022). Source: REFINITIV, Analysis by Kalkine Group

Conclusion

Investors who have invested into this IPO can consider ‘Exiting’ from their position at the price of $15.10 as on February 09, 2022, given:

Higher dependency on limited customers: A considerable amount of the company's revenue is dependent on a small number of customers. Any loss of, or significant drop in sales to, one or more of its considerable customers could have a detrimental impact on its top line and operating results.

Short term purchase agreements: The company does not have any long-term purchasing commitments from its clients. In the event of cancellation or amendment of the purchase orders, the company's operating results may suffer.

Intense competition: The company faces tough competition and anticipates that competition will rise in the future. If it fails to compete effectively, it could adversely impact its business and operating results.

 

*The reference data in this report has been partly sourced from Refinitiv.


Disclaimer-

Kalkine Equities LLC provides general information about companies and their securities. The information contained in the reports, including any recommendations regarding the value of or transactions in any securities, does not take into account any of your investment objectives, financial situation or needs. Kalkine Equities LLC is not registered as an investment adviser in the U.S. with either the federal or state government. Before you make a decision about whether to invest in any securities, you should take into account your own objectives, financial situation and needs and seek independent financial advice. All information in our reports represents our views as at the date of publication and may change without notice.

Kalkine Media LLC, an affiliate of Kalkine Equities LLC, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.