Education
About Us
Working with TipRanks
Follow Us
Credo Technology Group Holding Ltd (CRDO)
NASDAQ:CRDO
RESEARCH TOOLSreports
Top Page
Credo Technology Group Holding Ltd
(NASDAQ:CRDO)
Rating:76Outperform
Price Target:
$106.00
▲(14.31%Upside)
Positive Factors
Financial Performance
Credo Technology Group reported a very strong set of results and guidance, sending shares up over 10%.
Market Expansion
Credo is poised to benefit from AI-driven demand in datacenters, supporting long-term growth in its AEC and Optical segments.
Revenue Growth
Management expects F2026 revenue to grow approximately 85% year-over-year to over $800 million, quelling concerns about sustainability.
Negative Factors
Competition
Increasing competition from MRVL and AVGO targeting the same market segments could lead to price erosion and potential loss of market share.
Expenditure Risk
CRDO's recent capacity expansions expose it to risks associated with any slowdown in cloud capital expenditures.
Tariff Risk
Tariff uncertainty persists and remains a fluid risk, although current guidance assumes no material changes.
Credo Technology Group Holding Ltd (CRDO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.92B
Dividend YieldN/A
Average Volume (3M)6.04M
Price to Earnings (P/E)332.7
Beta (1Y)2.98
Revenue Growth126.34%
EPS GrowthN/A
CountryUS
Employees500
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.35
Shares Outstanding171,641,830
10 Day Avg. Volume5,441,940
30 Day Avg. Volume6,037,841
Financial Highlights & Ratios
PEG Ratio0.25
Price to Book (P/B)23.40
Price to Sales (P/S)0.00
P/FCF Ratio547.69
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue12.77
Enterprise Value/Gross Profit55.39
Enterprise Value/Ebitda432.59
Forecast
1Y Price Target
$89.82Price Target Upside-3.14% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering11
Credo Technology Group Holding Ltd Business Overview & Revenue Model
Company DescriptionCredo 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 MoneyCredo 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 Earnings Call Summary
Earnings Call Date:Jun 02, 2025
(Q4-2025)
| % Change Since: 48.01%|
Next Earnings Date:Aug 27, 2025
Earnings Call Sentiment Positive
Credo's earnings call highlighted significant revenue growth, strong gross margins, and successful customer diversification. Despite these positive results, concerns about tariffs and increased inventory levels were noted. Overall, the positive aspects notably outweigh the challenges.Q4-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Credo achieved revenue of $437 million for fiscal '25, marking a growth of 126% year-over-year. Q4 revenue was $170 million, up 180% year-over-year and 26% sequentially.
Strong Non-GAAP Gross Margin
Fiscal '25 non-GAAP gross margin was 65%, with Q4 non-GAAP gross margin at 67.4%, up 355 basis points sequentially.
Significant Customer Diversification
Three hyperscalers each contributed over 10% of Q4 revenue, with plans to ramp two more in the second half of fiscal '26.
Optical and Retimer Business Growth
Optical DSP revenue targets were achieved, with a significant 800 gig transceiver win. Retimer business showed robust results, driven by 50 gig and 100 gig per lane Ethernet solutions.
Strong Operating Margin and Cash Flow
Fiscal '25 operating margin improved by 2,500 basis points. Q4 non-GAAP operating income was $62.5 million, and cash flow from operations was $57.8 million.
Negative Updates
Concerns Over Tariff Regime
Uncertainty around tariffs remains a concern, affecting future planning and product cost structure.
Inventory Levels
Q4 ending inventory was $90 million, up $36.8 million sequentially, suggesting potential challenges in inventory management.
Company Guidance
During the earnings call for the fourth quarter of fiscal 2025, Credo reported remarkable financial performance and provided guidance for the upcoming fiscal year. In Q4, the company achieved revenue of $170 million, marking a 26% sequential increase and a 180% rise year-over-year, with a non-GAAP gross margin of 67.4%. For the full fiscal year 2025, revenue reached $437 million, a 126% increase from the previous year, with a non-GAAP gross margin of 65%. Looking ahead to Q1 of fiscal 2026, Credo expects revenue between $185 million and $195 million and a non-GAAP gross margin of 64% to 66%. The company anticipates fiscal 2026 revenue to exceed $800 million, reflecting growth above 85% year-over-year, driven by diversification and expansion into new hyperscaler customers. Credo's strategic focus on innovative high-speed connectivity solutions and customer diversification positions the company for sustained growth, with a long-term outlook including significant contributions from its optical and advanced connectivity solutions.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.75
Positive
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.80
Positive
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.70
Positive
| Breakdown | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 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
Positive
92.73
Price Trends
68.37
Positive
58.16
Positive
56.25
Positive
Market Momentum
7.36
Positive
69.32
Neutral
79.49
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 92.73 is above the 20-day moving average (MA) of 84.78, above the 50-day MA of 68.37, and above the 200-day MA of 56.25, indicating a bullish trend. The MACD of 7.36 indicates Positive momentum. The RSI at 69.32 is Neutral, neither overbought nor oversold. The STOCH value of 79.49 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 Risk Analysis
Credo Technology Group Holding Ltd disclosed 64 risk factors in its most recent earnings report. Credo Technology Group Holding Ltd reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Credo Technology Group Holding Ltd Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $15.92B | 332.72 | 8.54% | ― | 126.34% | ― | |
73 Outperform | $11.33B | 109.57 | 3.71% | ― | 2.86% | -29.92% | |
64 Neutral | $6.32B | ― | -42.79% | ― | 3.58% | -22.74% | |
61 Neutral | $2.28B | 487.14 | 0.71% | ― | 3.34% | ― | |
54 Neutral | $15.40B | ― | -88.95% | ― | ― | -85.21% | |
50 Neutral | C$2.97B | 1.65 | -61.70% | 2.76% | 11.24% | -12.42% | |
47 Neutral | $9.01B | ― | -1.08% | ― | -23.85% | 88.39% |
* Technology Sector Average
Performance Comparison
CRDO
Credo Technology Group Holding Ltd
93.36
61.92
196.95%
CIEN
Ciena
78.66
31.93
68.33%
SATS
Echostar
32.66
14.91
84.00%
LITE
Lumentum Holdings
91.31
35.47
63.52%
VIAV
Viavi Solutions
10.29
3.23
45.75%
ASTS
AST SpaceMobile
45.46
33.32
274.46%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.