Stifel cuts Credo Technology price target to $69, keeps Buy rating

On Thursday, Stifel analysts adjusted their outlook on Credo Technology Group Holding Ltd. (NASDAQ:CRDO), lowering the price target to $69 from the previous $85, while still maintaining a Buy rating on the stock. The change reflects a revised valuation by Stifel, taking into account the current market conditions and future prospects of the company. Currently trading at $37.72, InvestingPro analysis suggests the stock is trading above its Fair Value, though analyst targets range from $50 to $90.

The analysts at Stifel expressed confidence in Credo Technology’s business model, citing significant leverage and a set of long-term targets that are supported by the robust secular growth of AI-driven deployments. Their optimism appears well-founded, as the company has already demonstrated impressive revenue growth of 99.38% over the last twelve months, with a current market capitalization of $6.4 billion. They highlighted the company’s potential for revenue growth, with an estimated compound annual growth rate (CAGR) of 95% from calendar year 2023 to 2025.

Furthermore, Stifel’s analysis anticipates strong gross margins (GMs) and operating margins (OMs) for Credo Technology in the near future. They foresee non-GAAP gross margins (NG GMs) reaching between 63% and 65%, and non-GAAP operating margins (NG OMs) achieving 30% to 35% over the longer term. InvestingPro data shows the company is already achieving a gross margin of 63.71%, aligning with these targets. For deeper insights into Credo’s financial health and detailed metrics, subscribers can access the comprehensive Pro Research Report.

The analysts’ commentary underscores the belief in the company’s ability to meet these ambitious targets due to the strong secular growth trend in AI-driven deployments. This growth is expected to drive Credo Technology’s business forward, despite the recent adjustment in the price target.

Investors and market watchers will be keeping a close eye on Credo Technology’s performance in the coming years, as the company strives to meet the expectations set forth by Stifel’s analysis. The company’s success in capitalizing on the opportunities presented by AI technology will be critical to achieving the financial targets and justifying the confidence reflected in the maintained Buy rating.

In other recent news, Credo Technology Group Holding Ltd reported impressive financial results for the third quarter of fiscal year 2025, with revenue reaching $135 million, a 154% year-over-year increase, and earnings per share (EPS) of $0.25, surpassing the forecast of $0.18. Stifel analysts maintained a Buy rating on Credo Technology, reiterating a price target of $85.00, highlighting the company’s ability to manage high-volume orders and maintain a robust supply chain. The analysts anticipate that Credo could achieve more than 50% year-over-year revenue growth in fiscal year 2026. Additionally, significant changes were announced in Credo’s board of directors, with William J. Brennan appointed as the new chairman, while Fariba Danesh joined the board as a Class II director. Cantor Fitzgerald also expressed a positive outlook on Credo Technology, emphasizing the semiconductor sector’s performance. These developments underscore Credo’s strategic positioning and operational strength in the competitive semiconductor landscape.

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