Credo Technology Group Holding Ltd (CRDO) AI Stock Analysis

• Market Cap: $25.99B
• Dividend Yield: N/A
• Average Volume (3M): 6.59M
• Price to Earnings (P/E): 125.6
• Beta (1Y): 3.41
• Revenue Growth: 224.17%
• EPS Growth: N/A
• Country: US
• Employees: 500
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.67
• Shares Outstanding: 180,631,710
• 10 Day Avg. Volume: 8,090,270
• 30 Day Avg. Volume: 6,589,124
• 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: 1.32
• Enterprise Value/Revenue: 43.22
• Enterprise Value/Gross Profit: 64.74
• Enterprise Value/Ebitda: 155.04
• 1Y Price Target: $223.89
• Price Target Upside: 55.58% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 2.66
• Revenue Forecast (FY): $1.17B

• Rating: 77 Outperform
• Price Target: $200.00 ▲(38.98% Upside)

Credo Technology Group's overall stock score is driven by its strong financial performance and positive earnings call outlook, indicating robust growth potential. However, the high valuation and potential operational challenges from increased expenses and supply chain issues temper the score. Technical indicators support a positive momentum, while recent corporate events reinforce shareholder confidence.

Positive Factors

Revenue Growth

The extraordinary year-over-year revenue growth underscores Credo's expanding market presence and successful product adoption, indicating strong future potential.

New Growth Pillars

These new product lines open up multibillion-dollar market opportunities, significantly expanding Credo's total addressable market and long-term growth potential.

Balance Sheet Health

A strong balance sheet with low leverage enhances Credo's financial stability, providing flexibility to invest in growth opportunities and weather economic fluctuations.

Negative Factors

Supply Chain Concerns

Supply chain constraints could limit production capacity and delay product deliveries, potentially impacting revenue growth and customer satisfaction.

Increasing Operating Expenses

Rising operating expenses may compress margins and reduce profitability, requiring careful management to maintain financial performance.

Equity Distribution Agreement

Issuing new shares could dilute existing shareholders' equity and may signal a need for capital, potentially impacting investor sentiment.

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 generates revenue through the sale of its semiconductor products and optical connectivity solutions. Key revenue streams include the sale of integrated circuits, optical modules, and related hardware that facilitate high-speed data transmission. The company also engages in partnerships with major technology firms and data center operators, which can lead to long-term contracts and bulk orders. Additionally, Credo may benefit from revenue generated through licensing agreements for its proprietary technology and ongoing support services for its products.

Credo Technology Group Holding Ltd Financial Statement Overview

Summary

Credo Technology Group exhibits strong financial performance with robust revenue growth, high profitability margins, low leverage, and effective cash management. The company is well-positioned financially with a solid growth trajectory and minimal financial risk.

Income Statement

Credo Technology Group has demonstrated strong revenue growth with a TTM revenue growth rate of 32.66%. The company maintains a healthy gross profit margin of 66.76% and a net profit margin of 26.63%, indicating robust profitability. The EBIT and EBITDA margins are also strong at 26.28% and 27.88%, respectively. These metrics reflect a solid financial performance with significant improvements over previous periods.

Balance Sheet

The balance sheet is stable with a low debt-to-equity ratio of 0.01, suggesting minimal leverage and financial risk. The return on equity is impressive at 25.18%, indicating efficient use of equity capital. The equity ratio stands at 88.76%, reflecting a strong equity base relative to total assets. Overall, the balance sheet shows a healthy financial position with low leverage and strong equity returns.

Cash Flow

Cash flow analysis reveals a significant improvement in free cash flow with a growth rate of 53.64%. The operating cash flow to net income ratio is 1.27, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 0.81, showing effective conversion of earnings into cash. These metrics highlight a positive cash flow trajectory and efficient cash management.

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	59.94M	-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	16.04M	13.87M	15.50M	17.19M	0.00
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: Neutral
• Last Price: 143.91
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRDO, the sentiment is Neutral. The current price of 143.91 is below the 20-day moving average (MA) of 159.94, below the 50-day MA of 156.32, and above the 200-day MA of 102.87, indicating a neutral trend. The MACD of 1.52 indicates Positive momentum. The RSI at 41.09 is Neutral, neither overbought nor oversold. The STOCH value of 5.03 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	77 Outperform	$25.99B	125.62	22.87%	―	224.17%	―
ERIC	74 Outperform	$32.07B	12.88	25.45%	2.54%	1.04%	―
CIEN	70 Outperform	$30.81B	257.17	4.45%	―	18.79%	49.53%
NOK	66 Neutral	$34.54B	35.28	4.03%	2.35%	5.05%	115.92%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
UI	60 Neutral	$33.96B	42.92	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.

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.

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.