Credo Technology Group (NASDAQ:CRDO) Shares Up 6.3% - Should You Buy?

Key Points

• Credo shares rose 6.3% to $182.28, despite trading below their 50-day and 200-day moving averages. The stock remains highly volatile, with a beta of 3.25 and a market capitalization of $34.26 billion.
• Recent operating results were strong: quarterly revenue increased 114.7% year over year to $479 million, while EPS of $1.20 exceeded analyst expectations. Analysts maintain a “Moderate Buy” consensus with an average price target of $262.67, though valuation concerns remain after the stock’s substantial rally.
• Credo’s growth outlook includes a potential optical-cable business designed to use about 30% less power than comparable copper products, but shipments are not expected until 2027. Multiple executives have sold shares under pre-arranged trading plans, a factor that could modestly weigh on investor sentiment.

Shares of Credo Technology Group Holding Ltd. (NASDAQ:CRDO - Get Free Report) rose 6.3% during trading on Wednesday. The stock traded as high as $189.88 and last traded at $182.28. 7,162,382 shares changed hands during trading, a decline of 6% from the average session volume of 7,580,708 shares. The stock had previously closed at $171.51.

More Credo Technology Group News

Here are the key news stories impacting Credo Technology Group this week:

• Positive Sentiment: Analysts see substantial upside: Two Wall Street firms reportedly believe Credo’s recent selloff has created an attractive entry point. Their targets imply roughly 80% potential upside, supported by the company’s triple-digit revenue growth and recent “beat-and-raise” quarterly results. Credo Technology Crumbled By 15% Over 3 Months But Has 80% Gains In Store According to Two Wall Street Firms
• Positive Sentiment: Optical-cable opportunity could broaden growth: Credo demonstrated a new optical cable designed to use approximately 30% less power than comparable copper products. Although shipments are not expected until 2027, the technology could become a second growth engine as AI data centers demand more efficient connectivity. Credo (CRDO): Can Optics Become the Second Engine for AI Data Center Cables?
• Neutral Sentiment: Performance remains strong but expectations are elevated: Coverage highlights Credo’s large multiyear stock advance and continued outperformance tied to AI data-center connectivity. However, investors are debating whether future cash flows justify the current valuation after the major run-up. Credo (CRDO) Stock Looks Fairly Priced After A Very Large 3 Year Run
• Negative Sentiment: CEO sold shares: Chief Executive Officer William Brennan sold 16,666 shares for approximately $2.9 million. The transaction occurred under a pre-arranged Rule 10b5-1 plan, reducing his direct ownership by about 1.04%, which limits its significance but may still weigh modestly on sentiment.

Wall Street Analysts Forecast Growth

CRDO has been the subject of a number of analyst reports. Zacks Research downgraded Credo Technology Group from a "strong-buy" rating to a "hold" rating in a research note on Monday, August 3rd. Barclays boosted their target price on shares of Credo Technology Group from $260.00 to $300.00 and gave the company an "overweight" rating in a research note on Monday, July 20th. TD Cowen boosted their price objective on Credo Technology Group from $260.00 to $300.00 and gave the company a "buy" rating in a research note on Tuesday, August 18th. Stifel Nicolaus cut their price target on Credo Technology Group from $350.00 to $310.00 and set a "buy" rating for the company in a report on Monday, October 5th. Finally, Susquehanna raised their price target on shares of Credo Technology Group from $235.00 to $250.00 and gave the company a "positive" rating in a report on Tuesday, July 21st. One analyst has rated the stock with a Strong Buy rating, fourteen have issued a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat, Credo Technology Group currently has an average rating of "Moderate Buy" and an average price target of $262.67.

Credo Technology Group Stock Up 6.3%

The stock has a market cap of $34.26 billion, a P/E ratio of 64.87, a P/E/G ratio of 0.69 and a beta of 3.25. The company has a 50-day simple moving average of $201.57 and a two-hundred day simple moving average of $206.74.

Credo Technology Group (NASDAQ:CRDO - Get Free Report) last announced its earnings results on Tuesday, September 1st. The company reported $1.20 EPS for the quarter, beating analysts' consensus estimates of $1.17 by $0.03. The company had revenue of $479.00 million during the quarter, compared to the consensus estimate of $473.30 million. Credo Technology Group had a return on equity of 28.77% and a net margin of 33.83%. The firm's revenue for the quarter was up 114.7% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.52 earnings per share. As a group, sell-side analysts forecast that Credo Technology Group Holding Ltd. will post 5.02 earnings per share for the current fiscal year.

Insider Activity at Credo Technology Group

In related news, CFO Daniel W. Fleming sold 7,580 shares of the stock in a transaction that occurred on Thursday, October 8th. The shares were sold at an average price of $212.91, for a total value of $1,613,857.80. Following the completion of the sale, the chief financial officer directly owned 492,208 shares of the company's stock, valued at approximately $104,796,005.28. This represents a 1.52% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Chi Cheng sold 27,500 shares of the business's stock in a transaction dated Tuesday, October 13th. The shares were sold at an average price of $192.99, for a total value of $5,307,225.00. Following the completion of the transaction, the chief technology officer owned 5,607,397 shares in the company, valued at $1,082,171,547.03. The trade was a 0.49% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 457,952 shares of company stock valued at $91,825,036 over the last three months. 9.06% of the stock is owned by insiders.

Hedge Funds Weigh In On Credo Technology Group

Several institutional investors have recently added to or reduced their stakes in the company. Bank of America Corp DE grew its position in Credo Technology Group by 13.7% during the second quarter. Bank of America Corp DE now owns 2,182,764 shares of the company's stock valued at $593,603,000 after buying an additional 262,479 shares during the period. Atreides Management LP lifted its position in shares of Credo Technology Group by 3.5% in the second quarter. Atreides Management LP now owns 1,129,285 shares of the company's stock valued at $307,109,000 after acquiring an additional 38,052 shares in the last quarter. The Manufacturers Life Insurance Company boosted its stake in Credo Technology Group by 192.1% during the 1st quarter. The Manufacturers Life Insurance Company now owns 1,047,084 shares of the company's stock worth $98,290,000 after purchasing an additional 688,596 shares during the last quarter. Value Aligned Research Advisors LLC acquired a new position in Credo Technology Group during the second quarter worth about $91,919,000. Finally, Zevenbergen Capital Investments LLC grew its position in shares of Credo Technology Group by 4.9% in the third quarter. Zevenbergen Capital Investments LLC now owns 418,991 shares of the company's stock valued at $81,615,000 after purchasing an additional 19,685 shares in the last quarter. Hedge funds and other institutional investors own 80.46% of the company's stock.

About Credo Technology Group

Credo Technology Group Holding Ltd. is a fabless semiconductor and connectivity solutions company that develops high-speed data-infrastructure technologies. Its products are designed to help data centers and communications networks move large volumes of information with lower power consumption and improved signal integrity.

The company's portfolio includes serializer/deserializer (SerDes) intellectual property, application-specific integrated circuits, active electrical cables, optical digital signal processors and related connectivity platforms.

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