Credo Technology Group Holding Ltd reports after the close today with the stock trading well above where the analyst consensus ever imagined it would be.
The price action alone defines the setup. CRDO closed Friday at $236.03 — up 42% in a month and 8% on the week — a move extraordinary even by AI-infrastructure semiconductor standards. That gap matters: the Street's mean price target is $211.86, roughly 10% below Friday's close. Goldman Sachs raised its target to $170 in mid-April; Needham held at $220. Both are now underwater. Rothschild initiated at Buy with a $206 target in May. The pattern is consistent — analysts have been chasing the stock higher and still cannot keep up. The print tonight is therefore less about whether CRDO can grow and more about whether the numbers justify a valuation the Street has not yet endorsed.
Options traders are not particularly defensive into the event. The put/call ratio dipped to 0.83, below its 20-day average of 0.88 — slightly more bullish than recent baseline and well inside the 52-week range of 0.66–1.62. There is no notable surge in downside protection. The borrow market tells the same story: availability has expanded sharply to 4,809% — nearly 48 shares available for every one shorted — the loosest borrow conditions in the past 52 weeks. Cost to borrow has doubled over the past month to 0.46%, but in absolute terms that remains trivially cheap. Short interest at 5.45% of float edged back up about 3.8% on the week after touching a 30-day low on May 26, but the 30-day trend is still net compression from mid-May peaks near 5.9%. This is a partial rebuild, not a renewed short conviction.
The bull and bear cases are well-defined heading in. Bulls point to guided revenue growth above 75% year-on-year in FY27, driven by hyperscaler adoption of Credo's advanced electronic components and a projected $500M contribution from the optical division. The company's Low-Loss Laser Coupling technology and vertically integrated modules are framed as durable competitive advantages. EPS momentum ranks in the 97th percentile on a 30-day basis and 95th over 90 days — the estimate revision trend has been unambiguously positive. Bears counter that the data infrastructure market is crowding fast, that the DustPhotonics acquisition brings integration risk and upfront cost drag, and that heavy customer concentration leaves the revenue base fragile. At a P/E of 37x and EV/EBITDA of 30x on current figures — with a forward multiple that implied far less than today's price — the valuation leaves little room for any stumble. Insider selling adds a small note of caution: the Founder and CTO, Chi Fung Cheng, offloaded shares in early May at prices between $172 and $185, well below where the stock trades now.
Prior earnings reactions have been violent in both directions — a 17% one-day gain and a 13% one-day drop in back-to-back quarters — which means historical precedent is no guide to direction, only to magnitude. Tonight's print tests whether the revenue and margin trajectory announced by management can validate a stock price the analyst community has not yet caught.
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