On Tuesday, Stifel maintained a Buy rating on Credo Technology Group Holding Ltd. (NASDAQ: NASDAQ:CRDO) and raised the price target to $75 from the previous $50. Currently trading at $47.80, the stock has delivered an impressive 145.51% return year-to-date, according to InvestingPro data.
This adjustment follows Credo Technology's strong performance in the October quarter, where the company reported revenues of $72.0 million, marking a 20.6% increase from the previous quarter and exceeding Stifel's estimate by 8.3%. The reported figure also surpassed the high-end of the company's guidance.
With a robust gross profit margin of 62.47% and strong market position reflected in its $7.94 billion market capitalization, InvestingPro analysis reveals 17 additional key insights about CRDO's financial health and growth prospects.
Credo Technology's January quarter outlook was significantly uplifted, with a revenue midpoint forecast of $120.0 million, representing a 66.6% sequential increase and a 44.6% rise against Stifel's prior estimate of $83.0 million. The firm attributes this positive adjustment to several factors, including data center trends that are accelerating the adoption of Active Electrical Cables (AEC).
The company's "Full Cable" business model has been validated by the strong outlook and visibility into fiscal year 2026, which predicts a baseline growth of over 50% year over year. This growth is expected due to the clear preference of hyperscalers for Credo Technology's complete cable solution offerings. Stifel's outlook anticipates that Credo will maintain its leadership in the AEC market well into the future.
Furthermore, Stifel has raised its fiscal year 2025 growth outlook to over 100% year over year, setting a baseline for fiscal year 2026 at an increase of over 50% year over year. This growth is anticipated to come from the broadening adoption of AEC across various programs, platforms, and customers, not limited to the Blackwell program.
The firm reiterated its Buy rating and raised the 12-month price target to $75, based on an enterprise value to sales ratio of 23.5 times their higher calendar year 2025 revenue estimate. Analyst targets for CRDO now range from $29 to $85, with a comprehensive analysis available in the InvestingPro Research Report, which provides deep-dive insights into the company's valuation and growth metrics.
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