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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on CRDO

Breaking News: Credo Technology Group Holding Ltd reported strong Q2 earnings, with revenue growth of 272% YoY to $268M and non-GAAP gross margin of 67.7%. The company issued robust Q3 guidance of $335-345M, driven by surging product demand and AI-driven growth. Analysts have raised their forecasts following the upbeat Q2 earnings. The stock is considered a must-own AI infrastructure stock. Some analysts recommend a buy, citing an attractive adjusted PEG ratio of 1.5x. Others have downgraded the stock, citing significant topline deceleration in fiscal 2027.

1.c. Company Highlights

2. Credo's Q2 Fiscal 2026 Earnings: A Strong Beat with Record Revenue

Credo reported a record revenue of $268 million for Q2 fiscal 2026, representing a 20% sequential growth and a 272% year-over-year increase. The company's non-GAAP gross margin was 67.7%, with $128 million of non-GAAP net income. Earnings per share (EPS) came in at $0.67, beating analyst estimates of $0.4918. The company's active electrical cables (AEC) product line remains the fastest-growing segment, driven by increasing customer diversity.

Publication Date: Dec -02

📋 Highlights
  • Record Q2 Revenue:: $268 million, 20% sequential growth, 272% year-over-year.
  • AEC Segment Growth:: Driven by 4 hyperscalers contributing >10% of total revenue each.
  • New Growth Pillars:: $10 billion combined market opportunity from Zero Flap optics, ALCs, and OmniConnect gearboxes.
  • Q3 Guidance:: Revenue $335–$345 million (27% sequential growth), non-GAAP gross margin 64–66%.
  • ASP Uplift:: Transition to 100Gig per lane drives higher average selling prices, with 112Gig VSR SerDes as best-in-class.

Growth Drivers and Product Expansion

The company has added three new growth pillars: Zero Flap optics, active LED cables (ALCs), and OmniConnect gearboxes, which are expected to provide a combined total market opportunity exceeding $10 billion. Credo's IC business is also expected to drive significant growth, driven by 50-gig and 100-gig per lane deployments. The company's diverse customer base, with five hyperscalers using its products at a significant scale, is expected to continue driving growth.

Outlook and Guidance

For Q3 fiscal 2026, Credo expects revenue between $335 million and $345 million, up 27% sequentially. Non-GAAP gross margin is expected to be between 64% and 66%. The company expects sequential revenue growth in the mid-single digits for the remainder of fiscal 2026, leading to more than 170% year-over-year growth. Analysts estimate next year's revenue growth at 126.8%, indicating a strong growth trajectory.

Valuation and Metrics

With a P/E Ratio of 140.16 and an EV/EBITDA of 130.87, Credo's valuation suggests that the market is pricing in significant growth expectations. The company's ROE of 25.18% and ROIC of 14.95% indicate strong profitability. The P/S Ratio of 37.18 also reflects the market's expectations for the company's revenue growth.

Operational Highlights

Credo is taking a vertically integrated approach to manufacturing, particularly with its AEC product line, where it produces cable solutions in-house. The company is also investing in new technologies, such as its 112-gig VSR SerDes technology, which it believes is best-in-class. As Credo continues to expand its product offerings and customer base, its strong financial performance and guidance suggest a positive outlook for the company.

3. NewsRoom

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CRDO Stock on an Upswing Post Robust Q2: Hold or Make an Exit?

Dec -04

Source: zacks.com

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Credo Stock: The Smart Money AI Bet?

Dec -04

Source: forbes.com

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Marvell's Strategic AI Moves Boost Stock Despite In-Line Earnings

Dec -03

Source: gurufocus.com

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Will CRDO's Expanding Hyperscaler Base Accelerate Growth Momentum?

Dec -03

Source: zacks.com

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Credo to Present at Barclays 23rd Annual Global Technology Conference

Dec -03

Source: businesswire.com

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Why Credo Stock Jumped Today

Dec -02

Source: fool.com

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Overlooked Stock: CRDO Taps All-Time High After Earnings

Dec -02

Source: youtube.com

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Credo Technologies Posted a Blowout Quarter—Here's What's Next

Dec -02

Source: marketbeat.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.73%)

6. Segments

Serializer/Deserializer and Digital Signal Processor Technologies

Expected Growth: 10.95%

Credo Technology Group Holding Ltd's Serializer/Deserializer and Digital Signal Processor Technologies are driven by growing demand for high-speed data transmission, increasing adoption of cloud computing, and rising need for efficient data processing. The 10.95% growth is also fueled by advancements in 5G, artificial intelligence, and the Internet of Things (IoT), which rely on high-performance serializer/deserializer and digital signal processing capabilities.

Intellectual Property License

Expected Growth: 9.9%

Credo Technology Group Holding Ltd's 9.9% growth in Intellectual Property License is driven by increasing demand for high-speed data transmission, growing adoption of 5G and IoT technologies, and strategic partnerships to expand its patent portfolio. Additionally, the company's focus on innovation and R&D investments has led to the development of new and valuable IP, further fueling growth.

Serializer/Deserializer and Digital Signal Processor Technologies Engineering Services

Expected Growth: 10.32%

Credo Technology Group Holding Ltd's Serializer/Deserializer and Digital Signal Processor Technologies Engineering Services growth is driven by increasing demand for high-speed data transmission, proliferation of 5G and IoT devices, and rising need for low-power, high-performance computing solutions. Additionally, advancements in artificial intelligence, machine learning, and cloud computing are fueling growth in this segment.

Intellectual Property License Engineering Services

Expected Growth: 9.9%

Credo Technology Group Holding Ltd's 9.9% growth in Intellectual Property License Engineering Services is driven by increasing demand for customized IP solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, R&D investments, and a strong sales pipeline have contributed to this growth.

7. Detailed Products

Optical Interconnects

Credo's optical interconnects provide high-speed connectivity solutions for data centers, high-performance computing, and artificial intelligence applications.

Active Electrical Cables

Credo's active electrical cables offer high-speed, low-power, and low-latency connectivity solutions for data centers, high-performance computing, and artificial intelligence applications.

SerDes IP Cores

Credo's SerDes IP cores provide high-speed, low-power, and low-latency serial link solutions for system-on-chip (SoC) designs.

High-Speed IP Cores

Credo's high-speed IP cores provide high-speed, low-power, and low-latency connectivity solutions for data centers, high-performance computing, and artificial intelligence applications.

Silicon Photonics

Credo's silicon photonics solutions provide high-speed, low-power, and low-latency optical connectivity solutions for data centers, high-performance computing, and artificial intelligence applications.

8. Credo Technology Group Holding Ltd's Porter Forces

Forces Ranking

Threat Of Substitutes

Credo Technology Group Holding Ltd has a moderate threat of substitutes due to the availability of alternative technologies and products in the market.

Bargaining Power Of Customers

Credo Technology Group Holding Ltd has a low bargaining power of customers due to its strong brand reputation and limited customer concentration.

Bargaining Power Of Suppliers

Credo Technology Group Holding Ltd has a moderate bargaining power of suppliers due to the presence of multiple suppliers in the market.

Threat Of New Entrants

Credo Technology Group Holding Ltd has a high threat of new entrants due to the low barriers to entry in the technology industry.

Intensity Of Rivalry

Credo Technology Group Holding Ltd operates in a highly competitive industry, leading to a high intensity of rivalry among existing competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.27%
Debt Cost 3.95%
Equity Weight 95.73%
Equity Cost 14.11%
WACC 13.68%
Leverage 4.46%

11. Quality Control: Credo Technology Group Holding Ltd passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Ubiquiti

A-Score: 5.0/10

Value: 0.0

Growth: 8.1

Quality: 8.4

Yield: 1.0

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Credo Technology Group Holding

A-Score: 4.8/10

Value: 0.0

Growth: 9.4

Quality: 8.1

Yield: 0.0

Momentum: 10.0

Volatility: 1.3

1-Year Total Return ->

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Belden

A-Score: 4.3/10

Value: 3.6

Growth: 6.0

Quality: 5.3

Yield: 0.0

Momentum: 4.0

Volatility: 6.7

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EchoStar

A-Score: 4.0/10

Value: 7.1

Growth: 4.2

Quality: 1.8

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

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Zebra Technologies

A-Score: 3.8/10

Value: 3.4

Growth: 5.4

Quality: 6.6

Yield: 0.0

Momentum: 2.5

Volatility: 5.0

1-Year Total Return ->

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Lumentum

A-Score: 3.5/10

Value: 2.2

Growth: 4.0

Quality: 2.3

Yield: 0.0

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

176.63$

Current Price

176.63$

Potential

-0.00%

Expected Cash-Flows