On Monday, Mizuho (NYSE:MFG) maintained its positive stance on Credo Technology Group Holding Ltd. (NASDAQ:CRDO) stock, reiterating an Outperform rating with a steady price target of $49.00.
The firm's analyst pointed to several factors supporting this view, including strong product ramps and an expanding manufacturing supply chain. These developments are seen as key drivers for the company's growth, especially as it makes strides in AI Data Center networking.
According to InvestingPro data, CRDO has demonstrated impressive momentum with a 151.46% year-to-date return, though the stock currently trades above its calculated Fair Value.
The analyst anticipates that Credo Technology will report earnings that align with consensus estimates for the October and January quarters, at $67 million and $85 million, respectively. There is also a potential for an upside, attributed to Accelerated Ethernet Controller (AEC) advancements.
The focus on AEC is expected to continue propelling the company's revenue growth well into 2025. InvestingPro analysis reveals strong fundamentals with a 62.47% gross profit margin and healthy liquidity, maintaining a current ratio of 7.81.
Credo Technology, which is set to report its earnings after the market closes today, has been identified as a significant disruptor in the AI Data Center networking space. The company's robust and growing portfolio of customers and products is seen as a differentiator that positions it favorably in the market.
Expectations are high for the company's financial performance in the coming years, with forecasted revenue increases of 64% and 57% year-over-year for fiscal years 2025 and 2026. These projections are largely fueled by the company's AEC business, which is gaining traction with three key Hyperscalers and is expected to see further expansion with additional xAI products in the March quarter.
The affirmation of the Outperform rating and price target underscores the analyst's confidence in Credo Technology's trajectory and its role in the evolving landscape of AI and networking technologies.
In other recent news, Credo Technology Group Holding Ltd. has seen a series of significant updates. Mizuho Securities has maintained its Outperform rating on the company, raising its price target to $49.00 based on strong financial projections. The firm's Fiscal Year 2027 estimates for Credo Technology project revenues of $675 million and earnings per share (EPS) of $1.25, surpassing consensus projections.
Additionally, Credo Technology has unveiled its 800G ZeroFlap family of HiWire Active Electrical Cables, designed to support artificial intelligence backend networks with enhanced reliability and signal integrity. This product launch is part of the company's strategy to meet the growing demand for higher bandwidth and energy efficiency in data infrastructure.
On the financial front, Credo Technology reported robust Q1 2025 results, with revenues reaching $59.7 million and a non-GAAP gross margin of 62.9%. This performance was primarily driven by expanding AI deployments. Analysts at TD (TSX:TD) Cowen, Craig-Hallum, and Needham have all maintained a Buy rating for Credo Technology, with price targets set at $40, $38, and $33 respectively.
In governance matters, Credo Technology's shareholders recently approved key proposals during its 2024 Annual General Meeting. These included the election of three Class III directors and the ratification of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending May 3, 2025. These are among the recent developments in Credo Technology's operations and market strategy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.