Will CRDO Stock Rise After Earnings?

Credo Technology (NASDAQ:CRDO), a company specializing in electrical cable and interconnect products, is set to announce its earnings on Monday, June 2, 2025. For traders focused on events, historical data since 2022 indicates that the stock has nearly an equal probability of rising or declining following its earnings announcement. CRDO recorded a positive one-day return in 54% of cases after earnings releases over the past three years. In the instances of positive performance, the median one-day return was quite significant at 23.2%, with a maximum positive one-day return of 47.9%. This underscores the considerable volatility the stock undergoes around earnings announcements.

While the actual performance relative to analyst expectations and market forecasts will be crucial, recognizing these historical trends can provide an edge to event-driven traders. There are two primary strategies to consider:

• Pre-Earnings Positioning: Assess the historical probabilities and take a position in the stock ahead of the earnings report’s release.
• Post-Earnings Positioning: Analyze how immediate and medium-term returns are correlated after earnings are disclosed, and then modify your position accordingly.

Analysts expect Credo Technology to announce earnings of $0.27 per share on revenues of $159.59 million. This marks a notable increase compared to the same quarter last year, when the company reported earnings of $0.07 per share on sales of $60.78 million. From a fundamental perspective, Credo Technology currently has a market capitalization of $10 billion. In the past year, the company generated $328 million in revenue. It reported an operating loss of $3.8 million but achieved a net income of $5.1 million. Therefore, if you are seeking potential gains with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative — it has outperformed the S&P 500 and delivered returns exceeding 91% since its inception. Separately, see – What’s Behind The 400% Rise In IONQ Stock?

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CRDO Stock Historical Odds Of Positive Post-Earnings Returns

Some insights on one-day (1D) post-earnings returns:

• There are 13 earnings data points recorded over the past five years, with 7 positive and 6 negative one-day (1D) returns observed. Overall, positive 1D returns occurred approximately 54% of the time.
• Interestingly, this percentage rises to 58% when considering data for the last 3 years instead of going back 5 years.
• The median of the 7 positive returns = 23%, and the median of the 6 negative returns = -6.4%

Additional data concerning observed 5-Day (5D) and 21-Day (21D) returns following earnings releases are summarized alongside the statistics in the table below.

CRDO Stock Correlation Between 1D, 5D, and 21D Historical Returns

A relatively lower risk strategy (though ineffective if the correlation is weak) involves understanding the correlation between short-term and medium-term returns after earnings, identifying a pair that demonstrates the highest correlation, and executing the corresponding trade. For instance, if 1D and 5D exhibit the strongest correlation, a trader can position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data derived from the 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and the subsequent 5D returns.

Is There Any Correlation of CRDO Stock With Peer Earnings?

At times, the performance of peers can impact the stock reaction following earnings. In fact, the pricing may start to adjust before the earnings announcements are made. Below is historical data comparing the post-earnings performance of Credo Technology stock with the stock performance of peers that announced earnings just prior to Credo Technology. For an accurate comparison, peer stock returns also reflect post-earnings one-day (1D) returns.

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