Credo: Time To Take Profits After A 100% Return (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 is growing impressively at >150% YoY, and its FY26 revenue outlook is strong at >80% YoY. This is driven by strong customer adoption of its products.
• Although Credo is at all-time high gross margins as of the latest quarter, I expect it to moderate and stabilize at around 65% levels; the higher end of the target range.
• Credo's cash flow conversion is improving via lower receivables enabled by successful product ramps.
• Given the higher growth momentum and prospects now, CRDO seems attractively valued vs. both its historical valuation range and its comps. But CRDO vs. SPX500 technicals have paused at a key resistance level.
• Credo has a 61% top customer concentration with Amazon. This makes Amazon's capex spending a key risk monitorable that could be either a positive or negative catalyst.

Read the full article here.