Credo Technology Group Holding Ltd (NASDAQ:CRDO) Quarterly Earnings Preview

• Earnings Expectations: Analysts predict an EPS of $0.27 and revenue of approximately $159.6 million, indicating a significant year-over-year growth of 163.2%.
• Stock Performance and Valuation: CRDO's stock has surged by 24% in the past three months, despite concerns over its high P/E ratio of 2096.01.
• Financial Health: With a strong equity position and a minimal debt-to-equity ratio of 0.026, Credo showcases robust liquidity with a current ratio of 7.67.

Credo Technology Group Holding Ltd, listed as NASDAQ:CRDO, is gearing up to release its quarterly earnings on June 2, 2025. Analysts are setting their expectations for an earnings per share (EPS) of $0.27, with projected revenue of approximately $159.6 million. These figures are in line with the Zacks Consensus Estimate, which also anticipates an EPS of $0.27 and revenue of $160 million, showcasing a significant 163.2% year-over-year growth.

In the recent quarter, CRDO's stock has experienced a notable surge of 24%, reflecting strong investor interest. However, the company's high valuation, underscored by a trailing twelve months (TTM) price-to-earnings (P/E) ratio of 2096.01, alongside customer risks, may cap its near-term growth potential.

Despite these valuation concerns, Credo has consistently outperformed earnings expectations, surpassing the Zacks Consensus Estimate in three of the last four quarters with an average earnings surprise of 29.7%. This history of strong performance hints at the potential for another robust earnings report, although current models remain cautious about predicting a definitive earnings beat.

The company's leadership in Active Electrical Cables (AECs) is supported by strong revenue growth and a diversified customer base. Credo anticipates fiscal fourth-quarter revenues to be in the range of $155 million to $165 million. While reliance on Amazon Web Services (AWS) presents certain risks, expanding relationships with other hyperscalers are expected to alleviate these concerns.

Credo's financial health is highlighted by a premium valuation, with a price-to-sales ratio of 33.07 and an enterprise value to sales ratio of 32.21. Despite a low earnings yield of 0.048%, the company maintains a strong equity position with a minimal debt-to-equity ratio of 0.026. Its current ratio of 7.67 indicates robust liquidity, enabling it to comfortably cover short-term liabilities.