Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 31 Jan, 25 | CRDO | Buy | USD 64.6 | USD 69.4 | USD 73.2 | 4 days | 13.3% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Credo Technology Group Holding Ltd provides various high-speed connectivCredo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Mexico, Mainland China, Hong Kong, and internationally. Its products include HiWire active electrical cables, optical digital signal processors, low-power line card PHY, serializer/deserializer (SerDes) chiplets, and SerDes IP. The company also offers intellectual property solutions consist of SerDes IP licensing. It sells its products to hyperscalers, original equipment manufacturers, original design manufacturers and optical module manufacturers, as well as into the enterprise and HPC markets. The company was founded in 2008 and is headquartered in San Jose, California.ity solutions for optical and electrical Ethernet applications in the United States, Mexico, Mainland China, Hong Kong, and internationally. Its products include integrated circuits, active electrical cables, and SerDes chiplets that are based on its serializer/deserializer and digital signal processor technologies. The company also offers intellectual property solutions consist of SerDes IP licensing. The company was founded in 2008 and is headquartered in San Jose, California.
Improved Profitability (Non-GAAP) – The company reported non-GAAP net income of $12.3 million, a significant improvement over the GAAP net loss of $(4.2) million, demonstrating strong operational efficiency.
Strong Revenue Growth – Revenue grew 20.6% quarter-over-quarter and 63.6% year-over-year, reaching a record $72.0 million in Q2 FY25.
Declining Gross Margin Forecast – GAAP gross margin is expected to decline to 60.6%-62.6% in Q3 FY25 (from 63.2% in Q2 FY25), which may indicate rising costs or pricing pressures.
GAAP Net Loss – The company still reported a GAAP net loss of $(4.2) million, despite strong revenue growth, indicating ongoing financial challenges under standard accounting principles.
Key investment risks for Credo include its reliance on AI-driven demand sustainability, declining gross margins, ongoing GAAP net losses, and potential volatility in customer orders impacting future revenue growth.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 64.6 | 57.5 | 69.4 | 73.2 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Price Action Analysis (on the daily chart)
The share price of CRDO took support at key levels and drifted higher, suggesting a potential for short-term gains. As the stock rises, it is anticipated to encounter a notable resistance level at USD 74.38, which may be reached in the next 2-4 weeks. Should the stock break through this level, it could trigger additional buying momentum and pave the way for further gains.
Technical Indicators Analysis (On the daily chart)
On the daily chart, the 14-period Relative Strength Index (RSI) is trending higher, indicating a positive bias. Trading volumes seem to confirm this upward trend. Furthermore, the stock price moving above its 21-day Simple Moving Average (SMA), supporting positive bias.
As per the above-mentioned price action and technical indicators analysis, Credo Technology Group Holding Ltd (NASDAQ: CRDO) is looking technically well-placed on the chart, and a ‘Buy’ recommendation has been given on the stock.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Communication Equipment
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| CRDO Credo Technology Group Holding Ltd |
0.22 0.55% | 40.38 | - | 69.93 | 17.76 | 5.46 | 15.36 | -77.6321 |
| CSCO Cisco Systems Inc |
0.04 0.07% | 61.76 | 15.64 | 12.80 | 3.43 | 4.25 | 3.19 | 10.03 |
| MSI Motorola Solutions Inc |
0.34 0.08% | 438.15 | 31.36 | 23.98 | 5.22 | 141.85 | 5.79 | 20.98 |
| HPE Hewlett Packard Enterprise Co |
0.13 0.86% | 15.56 | 10.92 | 8.74 | 0.74 | 1.02 | 1.02 | 5.92 |
| ERIXF Telefonaktiebolaget LM Ericsson Class B |
- -% | 8.25 | - | 11.38 | 0.07 | 1.95 | 0.07 | 0.74 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from a high-risk perspective and recommendations are provided for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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