Credo: I Sold This Way Too Soon (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Credo Technology Group (CRDO) is well-positioned for aggressive growth, driven by greater compute densities in data center configurations and its superior networking products like the active electrical cable.
• CRDO's management demonstrates strong execution and a clear focus on scaling revenues whilst staying in their connectivity niche, leveraging their core SerDes technology and a systems-level approach to product innovation.
• CRDO stock is trading at a lower than typical premium vs its comps. And the stock's appreciation is driven mostly by earnings growth expectations rather than multiple expansion.
• The overall trend on CRDO vs. SPX500 is clearly bullish but the alpha generation may pause here for a while as the ratio prices undergo a correction.
• Credo's concentrated customer base makes its revenue profile riskier and more volatile, especially as consensus estimates for its top customers' capex have seen downward revisions for the next 4 quarters.

Read the full article here.