Street Calls of the Week
Investing.com - Needham has raised its price target on Credo Technology Group Holding Ltd. (NASDAQ:CRDO) to $150.00 from $85.00 while maintaining a Buy rating following the company’s quarterly results and guidance. The company, currently valued at $21.5 billion, is trading near its 52-week high of $134.35, according to InvestingPro data.
The price target increase comes after Credo reported stronger-than-expected results and raised its guidance, with the company now forecasting fiscal year 2026 revenue growth of approximately 120% year-over-year. This follows impressive revenue growth of 126.34% over the last twelve months, with the company maintaining strong gross profit margins of 64.77%. Needham has raised its fiscal 2026 revenue estimate by $155 million in response.
Credo’s customer base is diversifying, with three customers each representing more than 10% of revenue in the first quarter of fiscal 2026, accounting for 35%, 33%, and 20% of sales respectively. Management expects a fourth hyperscaler customer to join this group during fiscal 2026.
The company guided second-quarter fiscal 2026 revenue $35 million above Needham’s previous estimate, driven by strength across its top three customers and the ramp of Active Electrical Cables (AECs) at a fourth hyperscaler customer.
Needham’s new $150 price target is based on a 50x price-to-earnings multiple of its calendar year 2027 non-GAAP earnings per share estimate, with the firm noting that AEC expansion into scale-up networks should broaden Credo’s total addressable market. The stock currently trades at a P/E ratio of 322.79x, reflecting high growth expectations.
In other recent news, Credo Technology Group Holding Ltd reported impressive first-quarter results for fiscal year 2026, surpassing market expectations. The company achieved an earnings per share of $0.52, well above the projected $0.35, reflecting a 48.57% surprise. Additionally, Credo’s revenue reached $223.1 million, exceeding the forecasted $190.63 million. These results highlight a strong start to the fiscal year for the company. In another development, BofA Securities raised its price target for Credo Technology to $165 from $120, maintaining a Buy rating. BofA emphasized the company’s active electrical cables as a significant factor in this decision, citing their role in AI clusters. Credo was also named among BofA’s top four AI-leveraged stocks, alongside NVIDIA, Broadcom, and AMD. These recent developments indicate a positive trajectory for Credo Technology.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.