TD Cowen raises Credo Technology stock price target to $85 from $50

On Tuesday, TD Cowen analysts raised the price target for Credo Technology Group Holding Ltd. (NASDAQ: NASDAQ:CRDO) to $85 from $50, maintaining a Buy rating on the stock. The adjustment follows a strong set of results and guidance that sent shares of the company up more than 10% after-hours. This follows an impressive 148.71% return over the past year, with analyst targets now ranging from $34 to $94.

Credo Technology’s fiscal year 2026 growth target is now set at 85%, up from a previous estimate of 55%, according to the analysts. The company is seeing meaningful improvement in customer diversification, addressing a previously noted concern. Growth in Application Engineered Chip (AEC) sales continues to drive the current model, while the optical Digital Signal Processor (DSP) franchise is gaining momentum ahead of the 1.6T cycle. The company’s impressive 126.34% revenue growth and 64.77% gross margins support this ambitious outlook.According to InvestingPro, Credo maintains a GREAT financial health score, with 20+ additional insights available for subscribers.

The analysts reiterated their Buy rating, citing Credo Technology as their top small-to-mid-cap pick. They noted that their fiscal year 2026 and 2027 estimates have been significantly increased to account for the rapid expansion in artificial intelligence networking infrastructure.

The updated price target is based on a 15.5 times enterprise value-to-sales ratio on fiscal year 2027 estimates. The analysts acknowledged that this valuation is high but justified, given Credo Technology’s superior growth potential compared to its peers.

In other recent news, Credo Technology Group Holding Ltd. reported a notable financial performance, with a 25.9% increase in quarterly revenue, surpassing previous estimates by 6.3%. The company’s non-GAAP earnings per share reached $0.35, exceeding expectations by $0.08, and free cash flow was strong at $54.2 million. Credo Technology’s revenue guidance midpoint stands at $190 million, indicating an 11.7% quarter-over-quarter growth and 17.6% above prior estimates from Stifel. The company’s fiscal year 2026 outlook projects revenue exceeding $800 million, marking an 85% year-over-year increase.

Additionally, Needham raised its price target for Credo Technology to $85 from $80, citing strong revenue guidance and customer diversification efforts. Mizuho (NYSE:MFG) also increased its price target to $81 from $70, highlighting Credo’s strong financial performance and future guidance. Stifel raised its price target to $80 from $69, expressing confidence in Credo’s strategic execution and leadership in the Active Electrical Cables market. Noble Capital reaffirmed its Outperform rating, noting the company’s compelling valuation and potential for growth.

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