Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
On Tuesday, Mizuho Securities adjusted its outlook on Credo Technology Group Holding Ltd. (NASDAQ: NASDAQ:CRDO), increasing the price target to $35 from the previous $30, while maintaining an Outperform rating on the stock. This revision arrives as the firm anticipates CRDO's earnings report, which is scheduled to be released after market close on Wednesday.
The analyst at Mizuho highlighted several factors contributing to the optimistic stance on Credo Technology. The firm's key product developments are expected to benefit from the continued growth in AI spending. Notable points include positive indicators from industry peers NVDA and MRVL concerning Ethernet growth and data center spending, which are seen as favorable for CRDO.
Credo Technology's robust portfolio of SerDes IP, which supports server networking transitions at speeds ranging from 400G to 1.6T, is also seen as a key asset. This technology is crucial for AI server networking and is expected to remain relevant through the end of the decade.
Looking ahead, the second half of 2024 and the first half of 2025 are anticipated to provide additional momentum for Credo Technology. The company is expected to experience customer expansions, with more than three Advanced Electronic Companies (AEC) and Optical Original Equipment Manufacturers (OEMs) potentially increasing their use of Credo's Dove/Seagull optical DSP solutions.
The analyst's statement concluded with a reiteration of the Outperform rating and a modest increase in estimates, alongside the raised price target. The market is now looking forward to Credo Technology's earnings report, which will provide further insights into the company's financial performance and future prospects.
In other recent news, Credo Technology Group Holding Ltd. has been the subject of several optimistic analyst updates. Stifel raised its price target for the company from $36 to $40, maintaining a Buy rating based on expectations that Credo Technology may surpass July Quarter estimates.
The firm projects a revenue of $59.5 million for the quarter, despite a potential 2.1% quarter-over-quarter decrease. Similarly, TD Cowen has shown confidence in Credo Technology, raising its price target from $35 to $40, and upgrading the stock from Hold to Buy.
Credo Technology recently reported a record-breaking Q4 revenue of $60.8 million, an 89% increase year-over-year, primarily driven by its artificial intelligence applications. The company's IP business also experienced substantial growth, generating $16.6 million in Q4, marking a 193% increase year-over-year.
InvestingPro Insights
As Mizuho Securities raises its price target for Credo Technology Group Holding Ltd. (NASDAQ: CRDO), insights from InvestingPro provide additional context to the company's financial health and market performance. Credo Technology's market capitalization stands at approximately $5.79 billion, indicating a significant presence in the sector. Despite a challenging P/E ratio of -171.39, the company's gross profit margin is impressive at 61.89%, reflecting a strong ability to control costs relative to revenue.
InvestingPro Tips highlight that Credo Technology holds more cash than debt on its balance sheet, providing financial flexibility and stability. Furthermore, analysts expect both net income and sales to grow this year, which aligns with the positive outlook expressed by Mizuho Securities. Notably, five analysts have revised their earnings upwards for the upcoming period, signaling confidence in the company's future performance.
For readers interested in deeper analysis, InvestingPro offers additional tips on Credo Technology, which can be explored at https://www.investing.com/pro/CRDO. These insights, including expectations for profitability this year and a strong return over the last month, may prove valuable for investors considering Credo Technology's stock ahead of the earnings report.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.