Credo Technology (US:CRDO) ZACKS·2026-01-07 16:06Core Insights - Credo Technology Group Holding Ltd (CRDO) is experiencing rapid expansion driven by the AI infrastructure cycle, resulting in a 272% year-over-year revenue increase to $268 million in Q2 of fiscal 2026 [1][9] - The company has a strong cash position of $813.6 million, allowing it to invest in growth opportunities and maintain a solid balance sheet [1][4] - Management is focused on multi-billion-dollar growth initiatives, including Zero-Flap optics and active LED cables, with a total market opportunity expected to exceed $10 billion [3] Financial Performance - Cash flow from operating activities reached $61.7 million, an increase of $7.5 million sequentially, while free cash flow was $38.5 million [2] - For fiscal Q3, Credo anticipates revenues between $335 million and $345 million, indicating a 27% sequential growth at the midpoint, and expects over 170% year-over-year growth for fiscal 2026 [5] Strategic Initiatives - The strong cash balance supports Credo's M&A efforts, enhancing access to new technologies and accelerating organic growth [4] - Recent acquisition of Hyperlume, a developer of microLED technology, exemplifies the company's strategy to broaden its market reach [4] Market Position and Valuation - CRDO shares have declined by 25.8% over the past month, compared to a 9.2% decline in the Electronics-Semiconductors industry [11] - The forward 12-month Price/Sales ratio for CRDO is 39.79, higher than the sector's average of 33.96 [12] - The Zacks Consensus Estimate for CRDO earnings for fiscal 2026 has been significantly revised upwards over the past 60 days, indicating positive market sentiment [13]