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On Wednesday, Stifel analysts maintained a positive stance on Credo Technology Group Holding Ltd. (NASDAQ:CRDO), currently trading at $47.12 with a market capitalization of $9.08 billion, reiterating a Buy rating and a price target of $85.00. According to InvestingPro data, the stock has shown impressive momentum with a 161% return over the past year, despite recent volatility. The firm’s assessment follows Credo’s impressive financial performance for the January quarter, where the company reported revenue of $135.0 million, marking an 87.4% increase quarter-over-quarter and surpassing Stifel’s estimate by 12.5%. The revenue figure notably exceeded the firm’s $120.0 million forecast. InvestingPro data reveals the company maintains robust gross profit margins of 63.24%, with 10 analysts recently revising their earnings estimates upward.
Credo’s non-GAAP (NG) earnings per share (EPS) also outperformed expectations, coming in at $0.16, which was $0.07 higher than Stifel’s $0.09 estimate. The company’s raised outlook for the April quarter further bolstered confidence, with a projected revenue midpoint of $160.0 million. This forecast represents an 18.5% sequential growth and is 15.9% higher than Stifel’s previous estimate of $138.0 million, as well as surpassing the consensus estimate of $136.7 million.
The upward revision in the revenue outlook is primarily attributed to the ramp-up of Credo’s Advanced Electronic Components (AEC) program. However, the company’s other major product segments, including Optical DSPs and Line Card PHYs, are also expected to contribute to quarter-over-quarter growth.
Stifel’s analysts expressed their continued optimism regarding Credo’s growth trajectory, which has consistently outperformed strong market expectations. The firm anticipates that Credo is on track to achieve more than 50% year-over-year revenue growth in fiscal year 2026, following an expected 121% year-over-year revenue increase in fiscal year 2025. The reiterated 12-month price target of $85 reflects a 20.7x CY26E enterprise value to sales (EV/Sales) multiple, as per Stifel’s analysis. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value. Discover comprehensive insights and 18 additional ProTips for CRDO in the exclusive Pro Research Report, available to subscribers.
In other recent news, Credo Technology Group Holding Ltd reported strong financial results for the third quarter of fiscal year 2025, exceeding market expectations. The company announced an earnings per share of $0.25, surpassing the forecast of $0.18, while revenue reached $135 million, outperforming the anticipated $120.29 million. This marks a 154% increase in revenue year-over-year, highlighting Credo’s significant growth in the high-speed connectivity market. Furthermore, Credo projects continued revenue growth for the fourth quarter, with estimates ranging between $155 million and $165 million. The company also anticipates over 50% revenue growth from fiscal year 2025 to 2026, with operating expenses growing at half the rate of revenue. On the analyst front, there was no specific mention of upgrades or downgrades, but firms like Bank of America Securities and Barclays (LON:BARC) engaged in discussions about the company’s market positioning and growth strategy. Credo’s strategic focus on expanding into AI connectivity and PCIe retimers markets was emphasized, with expectations of continued scaling of revenue and profit.
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