Nucor earnings beat by $0.08, revenue fell short of estimates
On Wednesday, Stifel analysts reiterated a Buy rating and an $85.00 price target for Credo Technology Group Holding Ltd. (NASDAQ:CRDO), highlighting the company’s ability to manage high-volume orders and maintain a robust supply chain. The target represents significant upside potential, with analyst targets ranging from $60 to $90. According to InvestingPro data, the company has demonstrated impressive revenue growth of 99.38% over the last twelve months, supported by strong gross margins of 63.71%. The firm’s analysis pointed to a particularly high customer concentration last quarter, attributed to the timing of orders and customer requirements. Stifel noted that Credo’s largest customer had a significant need for volume delivery within the quarter, while other key customers had already acquired sufficient product earlier. InvestingPro analysis reveals the company maintains a healthy financial position with a current ratio of 7.67, indicating strong ability to meet short-term obligations. For deeper insights into CRDO’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Stifel expressed confidence in Credo Technology’s trajectory with its original lead customer, anticipating that the company could meet or even exceed the high end of its "prior historical" annual run-rate, which ranges between $50 million and $100 million. Additionally, the potential for backend artificial intelligence (AI) applications was mentioned, which could provide further opportunities for Credo if the lead customer decides to deploy the company’s active electrical cables (AECs) in that capacity.
The firm’s commentary emphasized Credo Technology’s control over its AEC supply chain ecosystem, from chip production to the finished cable, suggesting that the company is well-positioned to handle the specific product requirements of its customers without facing supply constraints. This operational strength is seen as aligning with Credo’s long-term growth plans.
Looking ahead, Stifel anticipates no supply issues that could hinder Credo’s growth. The company’s fourth and fifth customers are expected to begin their initial ramp by mid-fiscal year 2026. With minimal debt-to-equity of 0.02 and an Altman Z-Score of 13.96, InvestingPro data suggests the company is well-positioned financially to execute its growth strategy. InvestingPro subscribers have access to over 20 additional key insights and metrics that can help evaluate CRDO’s growth potential. The qualification process for the fourth customer’s application is described as lengthier, while the fifth customer’s qualification is progressing more rapidly, with both contributing to the revenue in a similar timeframe of mid to second half of fiscal year 2026.
In other recent news, Credo Technology Group Holding Ltd reported strong financial results for the third quarter of fiscal year 2025. The company achieved an earnings per share (EPS) of $0.25, surpassing the forecast of $0.18, and reported revenue of $135 million, exceeding the anticipated $120.29 million. This performance marked a 154% year-over-year increase in revenue, highlighting Credo’s robust growth trajectory. Stifel analysts maintained a Buy rating on Credo, with a price target of $85, following the company’s impressive financial performance. The firm noted that Credo’s revenue for the January quarter was $135 million, up 87.4% quarter-over-quarter, surpassing Stifel’s estimate by 12.5%.
Credo’s non-GAAP earnings per share (EPS) also exceeded expectations, coming in at $0.16, which was $0.07 higher than Stifel’s estimate. The company raised its outlook for the April quarter, projecting revenue at a midpoint of $160 million, representing an 18.5% sequential growth and 15.9% higher than Stifel’s previous estimate. The upward revision in the revenue outlook is attributed to the ramp-up of Credo’s Advanced Electronic Components (AEC) program. Credo anticipates over 50% revenue growth from fiscal year 2025 to fiscal year 2026, with operating expenses growing at half the rate of revenue.
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