Key Takeaways
- CRDO stock has rallied 18.8% following its latest quarterly earnings, significantly outpacing the S&P 500
- Fourth quarter fiscal 2026 revenue jumped 157% annually to $437 million, exceeding analyst projections
- Non-GAAP earnings per share of $1.16 surpassed the $1.03 consensus estimate by 12.6%
- Company forecasts 80%-plus revenue expansion for fiscal 2027, with optical segment revenues projected above $600 million
- Wall Street analysts maintain a consensus Buy recommendation with a mean price target of $263.11
Credo Technology Group (CRDO) has delivered an impressive 18.8% gain since releasing its most recent quarterly results, trading at $241.91 at Friday’s market open. This performance significantly outpaced the broader S&P 500 index during the same timeframe.
Credo Technology Group Holding Ltd, CRDO
The stock’s momentum stems directly from the company’s fourth quarter fiscal 2026 performance. Revenue reached $437 million, representing a 157% year-over-year surge and topping the Street’s $430.1 million expectation. Non-GAAP diluted earnings per share of $1.16 exceeded the consensus forecast of $1.03 by 12.6%.
Executives highlighted a remarkable milestone: fourth quarter revenue by itself surpassed CRDO’s complete fiscal 2025 annual revenue. This underscores the accelerating pace of AI infrastructure expansion flowing through the company’s customer pipeline.
Full fiscal 2026 revenue exceeded $1.3 billion, representing more than a tripling versus the prior year. Four major hyperscaler clients each represented at least 10% of total sales, with the largest three accounting for 34%, 27%, and 16% respectively.
Non-GAAP gross margin expanded to 68.3% during the quarter, up from 67.4% in the year-ago period. Net margin reached 51.9%, while free cash flow achieved a record $177.5 million. The company ended the quarter holding $1.4 billion in cash and short-term investments.
Looking ahead to Q1 fiscal 2027, management projects revenue between $465 million and $475 million. For the complete fiscal year, the company anticipates revenue growth exceeding 80%, with optical segment revenues expected to cross $600 million.
Optical Segment Emerges as Key Growth Driver
The company’s optical business expansion is receiving substantial support from its Dust Photonics acquisition. This transaction adds silicon photonics PIC capabilities and introduces 800G and 1.6T product offerings to the lineup, with 3.2T solutions currently under development.
Executives project that ZeroFlap optics, silicon photonics PICs, and optical DSPs will each generate over $100 million in revenue during fiscal 2027.
Analyst earnings projections have experienced significant upward revisions over the past month. The consensus EPS forecast has increased 18.12% since the earnings announcement. Zacks currently assigns CRDO a Rank #1 (Strong Buy) rating.
Insider Trading and Institutional Positioning
Among institutional investors, Vanguard, State Street, and Geode each expanded their CRDO holdings during Q4. Alliancebernstein increased its position by 66% throughout Q2. Institutional ownership currently represents 80.46% of shares outstanding.
Insider transactions have attracted some market attention. CFO Daniel W. Fleming divested 40,000 units on June 11 at an average price of $249.48, generating approximately $9.98 million in proceeds. The transaction occurred under a pre-established Rule 10b5-1 trading plan to satisfy tax liabilities related to equity compensation vesting. CTO Chi Fung Cheng sold 27,500 units during April through a comparable plan.
U.S. Representative Gilbert Ray Cisneros, Jr. also reported selling between $1,001 and $15,000 worth of CRDO shares on June 30.
Wall Street sentiment remains predominantly bullish. Evercore launched coverage with an Outperform rating and $325 price objective on June 22. JPMorgan elevated its target to $250 while maintaining an Overweight stance.
The Street’s consensus price target stands at $263.11 based on 19 analyst ratings, with 17 categorized as Buy or Strong Buy and two at Hold.
CRDO has recorded a 12-month high of $308.67 and a 12-month low of $86.49.
