Investing visuals
Technology Investor, Visual Company Research
Credo is a great business on fire sale, with fundamentals unchanged since its valuation was stretched at 22x forward revenue in June. @TheBigBerbowski notes the stock is down 50% from its high even as revenue grew 114.7% to $479 million and non-GAAP net income rose 140%. The risk/reward is very attractive, and the shares could trade significantly higher in 6-12 months. x.com x.comÂ
Credo's longer growth runway from the shift to optics far outweighs any pressure on margins, and its 35x forward P/E is justified by its industry position, growth and overall business quality. Its products will remain a copper and optics mix for the foreseeable future, so margins should not be hit much. This answers @MacMasterInvest, who asks whether lower-margin optics and the valuation are concerns alongside customer concentration. x.comÂ
Credo's near-total share of AI data-center cables and unchanged estimates make its lower multiple look like a fear-driven opportunity. Its stock went from 27x to 20x forward earnings while the supply chain building those systems guided 2027 revenue to double. Buyers this week will probably be very happy a year from now. x.comÂ
Credo's MicroVCSEL offers upside that does not appear priced in. Its copper and optics exposure, a SpaceX tailwind and fundamentals that look too good for its current valuation make it one of the tidiest AI infrastructure investments. x.comÂ
Credo needs a slightly lower price before adding. FY28 EPS of about $10, a 70% growth rate from today, would support a $350 stock at 35x, a 0.5x PEG. x.comÂ
Credo's repeatedly conservative guidance and quarterly beats suggest analysts understate next year's EBIT. It trades at 15x their estimate, but likely 12-13x next year's EBIT if management's guidance holds. Management has executed as well as almost any company in recent years, and the multiple could easily end up closer to 10x than 15x. x.comÂ
Credo's revenue is projected to double by 2029, which makes the stock hard not to be bullish on. x.comÂ
Credo was overpriced even with great earnings, and it is still a little pricey at $190. Per @wallstengine, revenue rose 114.7% to $479.0M, beating estimates, and Q2 guidance of $525M-$535M also topped expectations, yet the stock is down $112 from its high of a few months ago. Valuation matters, and $150-$170 would be a decent entry point. x.comÂ
Credo is a steal at about 70 times forward free cash flow given how fast cash generation is growing, supporting a raised target of $280 by the end of 2027. Revenue is expected to grow more than 80% year over year, and free cash flow reached about $178 million this quarter, up over 225%, with a credible path to roughly $600 million a year. It has no debt and expanding profitability. Any after-hours weakness misses the point; what matters is where the stock will be next year. x.comÂ
Credo is one of the cheapest AI growth stocks, trading around 26x forward earnings after a hard correction while revenue grew 115% to $479M and full-year growth is guided above 85%. Margin worries mostly reflect DustPhotonics amortization and stock comp; non-GAAP gross margin held near 68%. DustPhotonics adds a second engine in optics, with over $600M expected this year, and Credo's low-laser designs can ship through the laser shortage. One customer at about a third of revenue is the main risk. … Show more
Credo's results were underwhelming for a company that added $32 billion in market value in a few months, and shorts may punish the stock. Per @WisemanCap, fiscal Q4 EPS of $1.16 beat the $1.02 estimate and revenue of $437 million was just above estimates, while Q1 fiscal 2027 revenue guidance of $465-476 million was roughly in line with the $464.7 million consensus. x.com x.comÂ
Credo's growth rate is too hard to ignore, making it a coiled spring and another way to play AI beyond Nvidia and Nebius. The stock is still expensive but much more reasonably valued, though it may be early to buy. x.com x.comÂ
