Credo's 90% Revenue Growth Guidance Primes It For Inflection Higher
I remain bullish, reaffirming my $105 price target by early 2026, as Credo scales efficiently and generates real profitability.
Investment Thesis
Credo Technology (CRDO) just delivered a very strong quarter. That said, there was one blemish: the company guided for a slight compression in its non-GAAP gross margin for fiscal Q1 2026.
Still, I think most investors will look past this. The company’s guidance suggests that 90% year-over-year revenue growth could be on the table for this fiscal year — an outstanding figure.
Even more encouraging, Credo is no longer dependent solely on Amazon. The company is successfully diversifying its customer base.
On top of that, Credo is now generating free cash flow. I estimate the stock trades at around 57x forward free cash flow, giving it an adjusted PEG ratio of just 0.7x — a complete bargain!
I reaffirm my price target of $105 by early 2026.
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