Credo Technology Group Holding Ltd Ordinary Shares (CRDO)

FairStock Score: 55/100 — STEADY

Key Financials

Strengths

• Generates $172 million in annual free cash flow (0.5% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 27.5% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.01, providing financial flexibility
• Altman Z-Score of 112.1 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($20) with negative 828% margin of safety—limited downside protection

AI Analysis

Credo Technology Group Holding Ltd Ordinary Shares is a mid-cap technology company valued at $34.7 billion. The business generates $1.1 billion in annual revenue with a 14.7% net margin and $172 million in free cash flow. From a quality standpoint, Credo shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and Altman Z-Score of 112.1 confirms fortress-level solvency. On valuation, the stock is commanding a steep 102.0x multiple, with trades far above its Graham Number ($20) with no margin of safety. Growth dynamics show revenue growing at 201.5% and profit growth of 435.2%. Our composite FairStock Score of 55/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Credo's 201% revenue growth trajectory could accelerate as it captures additional market share in the technology sector. With $172 million in annual free cash flow (0.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 102x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer