Credo Technology Group Holding Ltd (CRDO) AI Stock Analysis

• Market Cap: $18.46B
• Dividend Yield: N/A
• Average Volume (3M): 4.73M
• Price to Earnings (P/E): 385.9
• Beta (1Y): 2.93
• Revenue Growth: 126.34%
• EPS Growth: N/A
• Country: US
• Employees: 500
• Sector: Technology
• Sector Strength: 91
• Industry: Communication Equipment
• EPS (TTM): 0.35
• Shares Outstanding: 171,641,830
• 10 Day Avg. Volume: 4,537,803
• 30 Day Avg. Volume: 4,732,661
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.45
• Enterprise Value/Revenue: 19.17
• Enterprise Value/Gross Profit: 29.60
• Enterprise Value/Ebitda: 133.16
• 1Y Price Target: $100.20
• Price Target Upside: -6.84% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 73 Outperform
• Price Target: $120.00 ▲(11.57%Upside)

Credo Technology Group has a strong financial foundation and impressive growth prospects, as evidenced by its recent earnings call. The technical analysis suggests continued positive momentum. However, the stock appears overvalued based on its high P/E ratio, presenting a potential risk if growth expectations are not met. The strong earnings call guidance and technical indicators are the most significant positive factors in the overall score.

Positive Factors

Customer Diversification

CRDO is experiencing customer diversification, with expectations of having 3-4 customers contributing 10% each of revenue in any given quarter in the upcoming fiscal years.

Financial Performance

CRDO's revenue increased significantly due to strong performance in the AEC sector, with sales growing by 26% quarter-on-quarter and 180% year-on-year.

Growth Potential

CRDO's management sees a significant growth opportunity with the AEC Total Addressable Market potentially reaching $5 billion to $10 billion, indicating a large room for increased adoption.

Negative Factors

Competition

There is increasing competition from MRVL and AVGO targeting similar market segments, which could lead to price erosion and potential loss of market share.

Economic Uncertainty

Tariff uncertainty persists and remains a fluid risk, although current guidance assumes no material changes.

Market Risk

CRDO remains exposed to AEC adoption risk, with unit ramp dependent on hyperscalers continuing strong in-rack upgrade pace.

Credo Technology Group Holding Ltd Business Overview & Revenue Model

Company Description

Credo Technology Group Holding Ltd (CRDO) is a leading provider in the semiconductor industry, specializing in high-performance connectivity solutions. The company focuses on delivering innovative, secure, and high-speed data transmission products and services that cater to the increasing demands of data center, networking, and telecommunications sectors. Credo's core offerings include optical and copper physical layer devices, digital signal processors, and other integrated circuits designed to enhance data transfer efficiency.

How the Company Makes Money

Credo Technology Group Holding Ltd generates revenue primarily through the sale of its semiconductor products and solutions. The company designs and markets integrated circuits and components that facilitate high-speed data transmission across various networking environments. Revenue streams include product sales to data center operators, original equipment manufacturers (OEMs), and networking companies that require advanced connectivity solutions to support growing data traffic and bandwidth needs. Key partnerships with industry leaders in telecommunications and data infrastructure sectors also play a crucial role in driving Credo's earnings by expanding its market reach and adoption of its technologies.

Credo Technology Group Holding Ltd Financial Statement Overview

Summary

Credo Technology Group has demonstrated impressive financial performance with substantial revenue growth, strong gross and net profit margins, and improved operational efficiency. The balance sheet shows minimal leverage and strong equity, while cash flow metrics indicate good cash generation with room for further enhancement in free cash flow.

Income Statement

Credo Technology Group has shown a strong improvement in its income statement metrics. The latest annual report indicates a substantial revenue growth rate of over 126% from the previous year, driven by strong sales performance. Gross profit margin is robust at approximately 64.8%, suggesting efficient production and sales processes. Net profit margin has turned positive to 11.9%, a significant turnaround from previous losses. The company has also transitioned to positive EBIT and EBITDA margins of 8.5% and 17.6% respectively, marking improved operational efficiency.

Balance Sheet

The balance sheet is strong, with a low debt-to-equity ratio of 0.019, indicating minimal leverage and a solid equity position. The company has a very healthy equity ratio of 84.2%, reflecting substantial shareholder equity relative to total assets. Return on equity stands at 7.7%, demonstrating effective use of equity to generate profits. The company's financial stability is further underscored by significant cash reserves and a high level of total assets.

Cash Flow

The cash flow statement shows a positive trajectory with an increase in free cash flow to $29 million, up from $17 million in the prior year. The operating cash flow to net income ratio is strong at 1.25, indicating good cash generation relative to net income. However, free cash flow to net income ratio is lower at 0.56, suggesting that a significant portion of earnings is still being reinvested or reserved for future growth. Overall, cash flow sustainability appears solid, although the company should continue focusing on enhancing free cash flow.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	436.77M	192.97M	184.19M	106.48M	58.70M
Gross Profit	282.91M	119.43M	106.19M	64.02M	38.28M
EBITDA	76.81M	-22.52M	-9.31M	-14.04M	-23.02M
Net Income	52.18M	-28.37M	-16.55M	-22.18M	-27.51M
Balance Sheet
Total Assets	809.26M	601.93M	397.29M	375.69M	155.49M
Cash, Cash Equivalents and Short-Term Investments	431.34M	410.00M	217.81M	259.32M	103.76M
Total Debt	12.69M	13.87M	15.50M	17.19M	197.97M
Total Liabilities	127.67M	61.73M	49.65M	41.53M	210.92M
Stockholders Equity	681.58M	540.20M	347.63M	334.16M	-55.43M
Cash Flow
Free Cash Flow	29.02M	17.09M	-46.33M	-48.41M	-48.42M
Operating Cash Flow	65.08M	32.74M	-24.61M	-30.83M	-42.36M
Investing Cash Flow	111.99M	-249.49M	-130.94M	-17.58M	-6.06M
Financing Cash Flow	-7.73M	175.28M	4.88M	204.18M	77.89M

Credo Technology Group Holding Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 107.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRDO, the sentiment is Positive. The current price of 107.56 is above the 20-day moving average (MA) of 100.79, above the 50-day MA of 86.33, and above the 200-day MA of 62.56, indicating a bullish trend. The MACD of 6.67 indicates Negative momentum. The RSI at 62.15 is Neutral, neither overbought nor oversold. The STOCH value of 78.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CRDO.

Credo Technology Group Holding Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRDO	73 Outperform	$18.46B	385.93	8.54%	―	126.34%	―
CIEN	71 Outperform	$12.53B	123.46	3.71%	―	2.86%	-29.92%
LITE	65 Neutral	$7.40B	―	-42.79%	―	3.58%	-22.74%
Sector *	63 Neutral	£521.99M	21.49	-8.07%	2.77%	3.30%	-18.10%
VIAV	58 Neutral	$2.18B	464.76	0.71%	―	3.34%	―
ASTS	54 Neutral	$18.02B	―	-88.95%	―	―	-85.21%
SATS	46 Neutral	$7.74B	―	-1.60%	―	-35.86%	85.81%