Credo Technology Analysts Explain Why Shares Are Down Despite 157% Revenue Growth, Raised Guidance

Credo Technology Group Holding Ltd (NASDAQ:CRDO) shares are down on Tuesday, despite the company reporting on Monday upbeat fiscal fourth-quarter results.

• Credo Technology Group stock is showing weakness. Why is CRDO stock trading lower?

Here are some key analyst takeaways:

• Rosenblatt Securities analyst Mike Genovese reiterated a Neutral rating, while lifting the price target from $175 to $215.
• Needham analyst Quinn Bolton reiterated a Buy rating, while raising the price target from $220 to $275.

Check out other analyst stock ratings.

Rosenblatt Securities: While Credo Technology reported its quarter results ahead of expectations and raised its full-year guidance, the new projections imply slightly lower Active Electrical Cables (AECs)/Copper revenue growth than was earlier forecasted, Genovese said in a note.

Revenues grew 157% year-on-year to $437 million, topping consensus by $5 million, but missing Rosenblatt's estimate by $3 million, he noted.

This marked the third consecutive quarter of deceleration in revenue growth from the peak of 274% year-on-year growth in the first quarter of fiscal 2026, the analyst stated. Management's sales guidance for the first quarter of fiscal 2027 at $465-$475 million was $9 million higher than consensus at the mid-point but missed Rosenblatt's estimate by $9 million, he added.

While the company now expects sales growth of around 80% in fiscal 2027, the Optical revenue guidance was raised by $100 million to $600 million, which takes its contribution to around 7% of total revenue growth, Genovese pointed out. "The math here implies slightly lower AEC/copper revenue growth in FY27 than before," he further wrote.

Needham: Credo Technology reported another beat-and-raise quarter, with revenue growth continuing to be driven by "AEC proliferation and customer diversification," Bolton said. He added that the main takeaways from the earnings were:

• Management raised its fiscal 2027 outlook and now expects total revenue growth of more than 80% versus its prior projection of 75%.
• Roughly 50% of the dollar increase in the outlook stems from the Optical portfolio.
• The other 50% stems from the existing Copper portfolio, mainly AECs.

Credo Technology now expects Optical revenue to cross $600 million in fiscal 2027, versus their prior projection of $500 million, the analyst stated.

With the DustPhotonics acquisition closed last week, "the company believes it has all the capabilities to bring to market a CPO/NPO solution in FY28," he further wrote.

CRDO Price Action: Shares of Credo Technology had declined by 1.40% to $222.95 at the time of publication on Tuesday.