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On Friday, Stifel analysts maintained a positive stance on Credo Technology Group Holding Ltd. (NASDAQ: NASDAQ:CRDO), reiterating a Buy rating and a $69.00 price target. Currently trading at $63.83 with a market capitalization of $10.8 billion, Credo has demonstrated impressive growth with revenue surging nearly 100% over the last twelve months. The firm’s analysts anticipate that Credo could report April quarter revenue that surpasses their $160.0 million estimate, marking an 18.5% quarter-over-quarter increase. According to InvestingPro data, 9 analysts have recently revised their earnings estimates upward, suggesting growing confidence in the company’s prospects. This projection is based on the expansion of multiple Advanced Error Correction (AEC) programs and consistent growth from Optical Digital Signal Processors (DSPs) and Line Card Physical Layer Devices (PHYs). The company maintains robust gross profit margins of 63.7%, demonstrating strong operational efficiency. For deeper insights into Credo’s financial health and growth potential, InvestingPro offers 20+ additional key metrics and analysis.
The analysts also suggest that Credo’s revenue for the July quarter could exceed their current $161.6 million estimate, which would represent a 1.0% quarter-over-quarter increase. This potential growth is attributed to the diversification of AEC customers and ongoing expansion from non-AEC product lines. Looking further into the second half of the calendar year 2025, Stifel expects that additional customers could start contributing more significantly to Credo’s revenue.
Stifel’s outlook is supported by capital expenditure (capex) guidance from major technology firms, indicating robust spending that could benefit Credo. The analysts referenced Google (NASDAQ:GOOGL)’s (GOOG) approximately $75 billion capex guide for the calendar year 2025, which implies quarter-over-quarter growth throughout the year. Microsoft’s (NASDAQ:MSFT) implied June quarter capex guide of about $24 billion represents an 11% increase from the previous quarter. Additionally, Meta Platforms (NASDAQ:META) has a $68 billion capex guide for 2025, suggesting strong sequential growth, and Amazon (NASDAQ:AMZN) is expected to have around $100 billion in capex for the same period.
In conclusion, Stifel’s analysts have reaffirmed their Buy rating and 12-month price target of $69 for Credo Technology Group Holding Ltd., which is based on a 16.7x multiple of the company’s expected calendar year 2026 enterprise value to sales. With an overall financial health score rated as "GOOD" by InvestingPro, and analyst targets ranging from $34.13 to $84.00, investors seeking comprehensive analysis can access Credo’s detailed Pro Research Report, part of InvestingPro’s coverage of 1,400+ US stocks.
In other recent news, Credo Technology Group Holding Ltd. reported impressive financial results for the January quarter, with revenue reaching $135.0 million, an 87.4% increase quarter-over-quarter, surpassing Stifel’s estimate by 12.5%. The company’s non-GAAP earnings per share were $0.16, exceeding expectations by $0.07. Credo’s raised outlook for the April quarter projects a revenue midpoint of $160.0 million, indicating an 18.5% sequential growth. Stifel analysts maintained a Buy rating on Credo, but adjusted the price target from $85 to $69, reflecting revised market conditions. They remain confident in Credo’s business model, anticipating a compound annual growth rate of 95% from 2023 to 2025.
Additionally, Credo announced a reshuffle of its board of directors, with William J. Brennan appointed as the new chairman and Fariba Danesh joining as a Class II director. The company emphasized the importance of experienced leadership in navigating the competitive semiconductor landscape. Cantor Fitzgerald recognized Credo as one of the top-performing companies in the semiconductor sector, alongside other notable firms. These recent developments highlight Credo’s strategic direction and financial performance.
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