Credo Technology Group Holding Ltd (CRDO) AI Stock Analysis

• Market Cap: $26.10B
• Dividend Yield: N/A
• Average Volume (3M): 5.76M
• Price to Earnings (P/E): 221.9
• Beta (1Y): 3.23
• Revenue Growth: 175.81%
• EPS Growth: N/A
• Country: US
• Employees: 500
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.52
• Shares Outstanding: 172,995,590
• 10 Day Avg. Volume: 5,617,684
• 30 Day Avg. Volume: 5,764,491
• PEG Ratio: -0.51
• Price to Book (P/B): 10.58
• Price to Sales (P/S): 16.51
• P/FCF Ratio: 248.47
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 32.31
• Enterprise Value/Gross Profit: 48.96
• Enterprise Value/Ebitda: 138.20
• 1Y Price Target: $167.22
• Price Target Upside: 10.85% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: $166.00 ▲(10.04% Upside)

Credo Technology Group's strong financial performance and positive earnings call outlook are the primary drivers of its overall stock score. However, the high P/E ratio and mixed technical indicators suggest caution. The company's robust growth prospects and strategic market positioning are promising, but valuation concerns and technical weaknesses temper the overall score.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong demand for Credo's products and effective market penetration, supporting long-term business expansion.

Strategic Partnerships

Strategic partnerships with major hyperscalers enhance Credo's market reach and provide a stable revenue stream, bolstering long-term growth prospects.

Acquisition of Hyperlume

The acquisition of Hyperlume allows Credo to enhance its product offerings and address future AI-driven data infrastructure needs, strengthening its competitive position.

Negative Factors

Inventory Increase

The increase in inventory levels could strain cash flow and indicate potential challenges in demand forecasting, impacting operational efficiency.

Nonlinear Growth Patterns

Nonlinear growth patterns can complicate revenue predictability and planning, potentially affecting long-term financial stability and investor confidence.

Optical Market Transition Delays

Delays in transitioning to new optical technologies could slow market adoption and impact revenue growth in the optical segment, affecting overall business momentum.

Credo Technology Group Holding Ltd Business Overview & Revenue Model

Company Description

Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Mexico, Mainland China, Hong Kong, and internationally. Its products include integrated circuits, active electrical cables, and SerDes chiplets that are based on its serializer/deserializer and digital signal processor technologies. The company also offers intellectual property solutions consist of SerDes IP licensing. The company was founded in 2008 and is headquartered in San Jose, California.

How the Company Makes Money

Credo Technology Group generates revenue primarily through the sale of its high-performance semiconductor products and optical interconnect solutions. The company's revenue model is based on direct sales to original equipment manufacturers (OEMs) and cloud service providers, who integrate Credo's technology into their data center infrastructure. Key revenue streams include product sales, licensing agreements for its patented technologies, and ongoing support and maintenance services. Significant partnerships with major technology firms and cloud providers also play a crucial role in expanding Credo's market reach and driving revenue growth, as these collaborations often lead to large-scale contracts and increased demand for their innovative solutions.

Credo Technology Group Holding Ltd Financial Statement Overview

Summary

Credo Technology Group demonstrates strong financial health with significant revenue and profit growth, efficient operational management, and a stable balance sheet. The company has effectively managed its leverage and demonstrated robust cash flow generation, positioning it well for future growth and stability in the communication equipment industry.

Income Statement

Credo Technology Group has demonstrated strong revenue growth with a 37.4% increase in the TTM period, supported by a robust gross profit margin of 65.98%. The net profit margin has improved significantly to 20.85%, indicating enhanced profitability. The EBIT and EBITDA margins also show healthy figures at 19.52% and 23.38% respectively, reflecting efficient operational management.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.02, indicating minimal leverage and financial risk. The return on equity is strong at 18.89%, showcasing effective use of equity to generate profits. The equity ratio stands at 86.32%, highlighting a stable financial structure with a high proportion of equity financing.

Cash Flow

Cash flow performance is impressive with a substantial free cash flow growth rate of 222.06% in the TTM period. The operating cash flow to net income ratio is 1.17, indicating strong cash generation relative to net income. The free cash flow to net income ratio of 0.74 further supports the company's ability to generate cash from its operations.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	600.13M	436.77M	192.97M	184.19M	106.48M	58.70M
Gross Profit	395.99M	282.91M	119.43M	106.19M	64.02M	38.28M
EBITDA	140.30M	59.94M	-22.52M	-9.31M	-14.04M	-23.02M
Net Income	125.12M	52.18M	-28.37M	-16.55M	-22.18M	-27.51M
Balance Sheet
Total Assets	905.17M	809.26M	601.93M	397.29M	375.69M	155.49M
Cash, Cash Equivalents and Short-Term Investments	479.65M	431.34M	410.00M	217.81M	259.32M	103.76M
Total Debt	15.61M	16.04M	13.87M	15.50M	17.19M	0.00
Total Liabilities	123.79M	127.67M	61.73M	49.65M	41.53M	210.92M
Stockholders Equity	781.38M	681.58M	540.20M	347.63M	334.16M	-55.43M
Cash Flow
Free Cash Flow	93.47M	29.02M	17.09M	-46.33M	-48.41M	-48.42M
Operating Cash Flow	126.49M	65.08M	32.74M	-24.61M	-30.83M	-42.36M
Investing Cash Flow	1.69M	111.99M	-249.49M	-130.94M	-17.58M	-6.06M
Financing Cash Flow	-12.30M	-7.73M	175.28M	4.88M	204.18M	77.89M

Credo Technology Group Holding Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 150.85
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 150.85 is below the 20-day moving average (MA) of 157.79, below the 50-day MA of 152.59, and above the 200-day MA of 96.23, indicating a neutral trend. The MACD of -3.47 indicates Positive momentum. The RSI at 49.97 is Neutral, neither overbought nor oversold. The STOCH value of 32.11 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
CIEN	74 Outperform	$27.46B	201.09	4.96%	―	12.97%	4.71%
ERIC	74 Outperform	$31.69B	12.65	25.45%	3.13%	1.04%	―
CRDO	70 Outperform	$26.10B	221.87	18.75%	―	175.81%	―
NOK	66 Neutral	$34.00B	34.27	4.03%	2.58%	5.05%	115.92%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
UI	60 Neutral	$32.10B	40.57	155.78%	0.50%	36.77%	102.83%

Credo Technology Group Holding Ltd Corporate Events

Credo Technology Appoints Brian Kelleher as Director

On October 23, 2025, Lip-Bu Tan resigned from the board of directors of Credo Technology Group Holding Ltd, with no disagreements on company matters. Subsequently, Brian Kelleher was appointed as a Class III director effective October 27, 2025, bringing extensive experience from his previous roles at NVIDIA and other tech companies, which may enhance the company’s strategic direction.

The most recent analyst rating on (CRDO) stock is a Buy with a $182.00 price target. To see the full list of analyst forecasts on Credo Technology Group Holding Ltd stock, see the CRDO Stock Forecast page.

Credo Technology Approves Key Proposals at AGM

On October 13, 2025, Credo Technology Group Holding Ltd held its Annual General Meeting where shareholders voted on key proposals. These included the election of three Class I directors, approval of executive compensation, and ratification of Ernst & Young LLP as the independent auditor for the fiscal year ending May 2, 2026. All proposals were approved, indicating shareholder support for the company’s current leadership and strategic direction.

The most recent analyst rating on (CRDO) stock is a Buy with a $170.00 price target. To see the full list of analyst forecasts on Credo Technology Group Holding Ltd stock, see the CRDO Stock Forecast page.

Credo Technology Enters Equity Distribution Agreement

On October 6, 2025, Credo Technology Group Holding Ltd entered into an equity distribution agreement with Goldman Sachs & Co. LLC to facilitate the sale of its ordinary shares, with a total offering price of up to $750 million. This agreement allows for the shares to be sold in various market transactions, potentially impacting the company’s market presence and providing liquidity options for stakeholders.

The most recent analyst rating on (CRDO) stock is a Buy with a $170.00 price target. To see the full list of analyst forecasts on Credo Technology Group Holding Ltd stock, see the CRDO Stock Forecast page.

Credo Technology Group Faces Ongoing Risks Threatening Financial Stability

Credo Technology Group Holding Ltd. faces significant risks and uncertainties that could impact its operations and financial performance. These risks, detailed in their Annual Report on Form 10-K for the fiscal year ended May 3, 2025, include potential adverse effects on their business, financial condition, and the trading price of their shares. Despite the passage of time, there have been no material changes to these risk factors as of their latest Quarterly Report on Form 10-Q. Stakeholders should remain vigilant as these risks continue to pose a threat to the company’s stability.

Credo Technology’s Earnings Call Highlights Robust Growth

Credo Technology Group Holding Ltd. recently held its earnings call, revealing a strong performance with significant revenue growth and successful expansion in various market segments. The sentiment during the call was overwhelmingly positive, despite some challenges such as nonlinear growth patterns and inventory increases. The company’s robust guidance and strategic positioning in emerging markets contribute to an optimistic outlook.

Credo Technology Reports Strong Q1 2026 Growth

Credo Technology Group Holding Ltd is a company that specializes in providing secure, high-speed connectivity solutions, primarily catering to AI-driven applications, cloud computing, and hyperscale networks. The company is known for its focus on reliability and energy efficiency.