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.com 

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.com 

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.com 

Credo has a lot of new businesses coming online that are not yet baked into projections. x.com 

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.com 

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.com 

SpaceX's AI buildout could add substantially to Credo's revenue. If SpaceX really spends $400B on capex next year, that could add $2B for Credo. In that scenario, Credo would probably do at least $5B in FY2028 revenue; at roughly 50% net margins, EPS would be about $14 versus the sell side's $9, putting shares near 12x FY2028 EPS with EPS growing at a 130% CAGR across FY2027 and FY2028. x.com  x.com 

Credo's projected EPS surge makes it one of the semiconductor industry's most explosive growth stories. The chart puts EPS at $0.31 in FY25, $9.69 in FY28E and $12.45 in FY29E, nearly 40x over four years. x.com 

Credo is buying its re-acceleration at a flat gross margin, and at 36 times forward earnings, growth without margin is worth less. Q2 revenue guidance of $525-535M topped the $514.7M consensus, but non-GAAP gross margin went 68.6%, 68.3%, 68.0% and is guided at 67-69% again, while the beat over estimates shrank from 41% to 0.8%. Three customers are 77% of revenue. Credo sells copper, and Marvell expects scale-up optics from 2027. A print above 69% on $530M would prove this too cautious. x.com  … Show more

Credo's valuation is not absurd relative to its growth. The latest selloff is another overreaction. x.com  x.com