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Investing.com - Mizuho (NYSE:MFG) has raised its price target on Credo Technology Group Holding Ltd (NASDAQ:CRDO) to $98.00 from $81.00 while maintaining an Outperform rating on the stock. The company’s shares have delivered an impressive 179% return over the past year, trading near its 52-week high of $95.71. According to InvestingPro analysis, the stock appears overvalued at current levels, with 9 analysts recently revising their earnings estimates upward.
The research firm kept its July quarter revenue and earnings per share estimates unchanged at $190 million and $0.37, respectively, compared to consensus estimates of $190 million and $0.36. This follows the company’s strong performance, with revenue growing 126% in the last twelve months and maintaining robust gross margins of 65%. InvestingPro has identified over 20 additional key insights about Credo’s financial health and growth prospects.
Mizuho increased its fiscal 2026 estimates from $815 million in revenue and $1.56 EPS to $832 million and $1.59, while raising fiscal 2027 projections from $1.00 billion and $2.01 to $1.15 billion and $2.24.
The firm believes Credo will continue benefiting from scale up and scale out trends in data centers, noting that Amazon (NASDAQ:AMZN) AWS now approaches 500,000 ASIC clusters and Google (NASDAQ:GOOGL)’s TPUv6 has reached approximately 100,000 clusters supporting its Gemini 2.0 platforms.
Mizuho highlighted Credo’s PCIe Scale Up cables’ technical advantages, including 6ns latency compared to competitors’ 10-12ns, with longer cables and better loss handling at 35-43db, which drives a 10x total addressable market with scale up design wins expected in the second half of 2025.
In other recent news, Credo Technology Group Holding Ltd. reported a strong financial performance, with a 25.9% increase in quarterly revenue, surpassing previous estimates by 6.3%. The company also exceeded expectations with non-GAAP earnings per share of $0.35 and a robust free cash flow of $54.2 million. Credo Technology’s fiscal year 2026 revenue is projected to exceed $800 million, marking an 85% year-over-year increase, driven by growth in their Application Engineered Chip (AEC) program and optical Digital Signal Processors (DSPs). Following these results, several analysts have adjusted their price targets for the company.
TD Cowen increased its price target to $95, maintaining a Buy rating, and highlighted Credo as its "Best Smidcap Idea for 2025." Stifel also raised its price target to $80, citing the company’s leadership in AI and data center connectivity. Needham adjusted its price target to $85, following Credo’s robust revenue guidance and customer diversification efforts. Noble Capital reiterated its Outperform rating with a price target of $14, emphasizing the company’s compelling valuation. These developments reflect a positive outlook for Credo Technology, supported by its strong market position and financial performance.
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