Credo Technology Group Holding Ltd (CRDO)
Valuation Overview•Is Credo Technology Group Holding Ltd Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
High-quality fundamentals with a strong composite quality score of 95/100, backed by robust profitability and solvency.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: Elite compounder with fortress-level fundamentals across every core pillar.
Wall Street is cautious, forecasting potential downside alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
CRDO exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins (highlighted by a massive 48.4% ROIC). This is backed by a fortress balance sheet, holding significant net cash ($1.1B) and minimal debt risk.
The company is driving exceptional top-line expansion (93.5% 3Y CAGR) paired with stable bottom-line earnings. This growth is supported by elite operational efficiency, sustaining an impressive 33.3% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $437.0M | +205.7% | +93.5% | +86.8% | — | |
| EBITDA | $172.1M | — | — | — | — | |
| Net Income | $169.1M | +805.0% | — | — | — | |
| EPS (Diluted) | $0.88 | +765.5% | — | — | — | |
| Free Cash Flow | $177.5M | +1302.4% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 68.0% | 64.9% | 62.5% | 66.2% |
| Operating Margin | 33.3% | 7.6% | -1.9% | -6.9% |
| Net Margin | 35.4% | 10.9% | 0.6% | -5.9% |
| FCF Margin | 30.5% | 15.3% | -4.9% | -20.4% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $1.02 | $1.16 | +13.7% | ||
| Q1'26 | $0.91 | $1.07 | +17.3% | ||
| Q4'25 | $0.49 | $0.67 | +36.2% | ||
| Q3'25 | $0.36 | $0.52 | +43.9% | ||
| Q2'25 | $0.27 | $0.35 | +27.8% | ||
| Q1'25 | $0.18 | $0.25 | +38.9% | ||
| Q4'24 | $0.05 | $0.07 | +40.0% | ||
| Q3'24 | $0.04 | $0.04 | -2.2% |
Total return is +192.6% (1Y), outperforming the benchmark by +171.8%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +87.8% | +80.5% | — |
| 1Y | +192.6% | +171.8% | — |
| 3YCAGR | +150.4% | +130.5% | — |
| 5YCAGR | +87.4% | +76.3% | — |
| 10YCAGR | +36.9% | +23.3% | — |
The S&P 500 is at 30.5x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Credo Technology Group Holding Ltd (CRDO) valuation, health, and returns.
Credo Technology Group Holding Ltd is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Slightly cheap versus peers compared to industry peers. overvalued (implying -55.5% downside from DCF intrinsic value of $120.95)
Credo Technology Group Holding Ltd has multiple valuation anchors: DCF Intrinsic Value: $120.95 | Peer Relative Fair Value: $294.29 | Wall Street Analyst Target: $253.60 (implying -5.7% upside). A convergence of these signals offers higher conviction.
Credo Technology Group Holding Ltd displays excellent financial health with a composite quality score of 95/100, supported by a Altman Z-Score of 100.0 (safe zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 48.4%.
Credo Technology Group Holding Ltd does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
Credo Technology Group Holding Ltd's current growth trajectory is Accelerating. The company achieved +205.7% 1Y revenue growth and +765.5% 1Y EPS growth, compared to its 3Y revenue CAGR of +93.5%.
Wall Street consensus is Buy based on 15 analysts, beating EPS expectations in 83% of recent quarters with a 7-quarter streak. The consensus price target represents a -5.7% change from current levels.
Investment risks for Credo Technology Group Holding Ltd include: -53.4% 1-year max drawdown, high beta (3.02x market volatility). Volatility risk is characterized by a beta of 3.02x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.