Stifel raises Credo Technology stock price target on strong outlook

On Tuesday, Stifel analysts raised the price target for Credo Technology Group Holding Ltd. (NASDAQ: NASDAQ:CRDO) to $80 from $69, while maintaining a Buy rating. This adjustment follows a robust financial performance and an optimistic outlook for the company. According to InvestingPro data, Credo, now valued at $10.64 billion, trades significantly above its Fair Value, with analyst targets ranging from $34 to $94.

Credo Technology reported a 25.9% quarter-over-quarter increase in revenue, surpassing previous estimates by 6.3%. The non-GAAP earnings per share reached $0.35, exceeding prior expectations by $0.08. Free cash flow was also strong at $54.2 million, compared to $29.0 million on a trailing twelve-month basis. InvestingPro analysis reveals impressive gross profit margins of 64.77% and substantial year-over-year revenue growth of 126.34%.

The company’s revenue guidance midpoint stands at $190 million, indicating an 11.7% quarter-over-quarter growth, which is 17.6% above Stifel’s prior estimates. This growth is attributed to the continued ramp-up of the AEC program and consistent quarterly growth in Optical DSPs and Line Card PHYs.

Looking ahead, Credo Technology’s fiscal year 2026 outlook projects revenue exceeding $800 million, marking an 85% year-over-year increase. This forecast is supported by a broadening of AEC ramps across multiple hyperscalers, new product ramps in Optical, and advancements in PCIe Gen 5/6 retimers.

Stifel analysts reiterated their Buy rating on Credo Technology, highlighting the company’s leadership in AI and data center connectivity, and its multiple differentiators, including SerDes technology, IC design, and full-solution ownership.

In other recent news, Credo Technology Group Holding Ltd. reported significant financial achievements and projections that have captured the attention of analysts. The company announced that its April quarter revenues reached $170 million, with earnings per share of $0.35, both exceeding consensus estimates. For the upcoming July quarter, Credo Technology projects revenues of $190 million, which is notably above the market’s expectations of $163 million. Additionally, the company anticipates fiscal year 2026 revenue to surpass $800 million, marking an 85% year-over-year growth.

Analysts have responded positively to these developments, with Needham raising its price target for Credo Technology to $85, citing the company’s robust revenue guidance and customer diversification. Similarly, Mizuho (NYSE:MFG) increased its price target to $81, while highlighting the company’s advancements in Optical and Active Electrical Cable technologies. Stifel also adjusted its outlook, setting a new price target of $80, reflecting optimism about Credo Technology’s strategic execution and market position.

The company has achieved notable successes, such as an 800G optical DSP win at a hyperscaler, and expects revenue from its optical division to double in fiscal year 2026. Credo Technology’s gross margin is projected to remain at the high end of its long-term goal of 63% to 65%, further supporting its growth trajectory. As Credo Technology continues to expand its market reach, analysts are maintaining a positive outlook, reinforced by the company’s innovative developments and strategic initiatives.

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