Credo Technology Group Holding (CRDO) has just closed FY 2026 with fourth quarter revenue of US$437.0 million and basic EPS of US$0.92, backed by trailing 12 month revenue of about US$1.3 billion and EPS of US$2.65. The company has seen quarterly revenue move from US$170.0 million in Q4 FY 2025 to US$437.0 million in Q4 FY 2026, while basic EPS shifted from US$0.21 to US$0.92 over the same period. This sets up the earnings release against a backdrop of very large earnings growth and a higher trailing net margin profile that will keep investor attention on how durable those margins look.

See our full analysis for Credo Technology Group Holding.

With the headline numbers on the table, the next step is to test them against the prevailing narratives around Credo Technology Group Holding, highlighting where the recent results support those stories and where they start to push back.

TTM net margin holds at 35.4%

• Over the trailing 12 months, Credo Technology Group Holding converted US$1.3b of revenue into US$472.3 million of net income, which works out to a 35.4% net profit margin compared with 11.9% in the prior year period.
• Consensus narrative highlights that high expectations for future growth could face pressure from rising expenses and possible product commoditization, and the current 35.4% margin directly feeds into that debate:
  • On one hand, margins at this level line up with the view that Credo’s high-speed connectivity products and IP can support strong profitability if demand holds.
  • On the other, the jump from 11.9% to 35.4% means any slowdown in revenue or higher cost base would have a long way to fall before margins resemble those earlier levels again.

EPS climbs from US$0.17 to US$0.92 in six quarters

• Basic EPS moved from US$0.17 in Q3 FY 2025 to US$0.92 in Q4 FY 2026, alongside quarterly net income rising from US$29.4 million to US$169.1 million over the same period.
• Supporters of the bullish narrative argue Credo’s AEC and DSP products could underpin high margin growth beyond current forecasts, and the EPS ramp gives them some concrete backing:
  • The trailing 12 month EPS of US$2.65 and reported earnings growth that is described as very large versus the prior year line up with the idea that profitability has moved to a different scale.
  • At the same time, bulls are assuming continued revenue and margin expansion from here, so the step up in EPS needs to be seen as a starting point rather than an endpoint for that thesis.

Bulls point to Credo’s rapid EPS ramp as evidence that AI and data center demand can keep supporting high margins, but the numbers also show how much is already priced into the growth story, so it is worth reading the bullish case in full before leaning too hard in either direction 🐂 Credo Technology Group Holding Bull Case.

Premium P/E against DCF fair value

• The stock trades on a trailing P/E of 94.4x, above both the semiconductor industry average of 72.4x and the peer average of 85.1x, and the current share price of US$239.18 sits well above a DCF fair value of about US$150.23.
• Investors taking the more cautious, bearish style narrative seriously focus on what happens if growth or margins come in below the high bar implied by today’s multiples:
  • Analysts in the consensus data expect revenue and earnings to grow around 26.9% and 27.5% per year, so the valuation already assumes meaningful expansion from the current US$1.3b of trailing revenue and US$472.3 million of earnings.
  • With the share price above both the DCF fair value and the 256.30 analyst target referenced in the inputs, any sign that earnings momentum slows from recent levels could matter more for Credo stock than for lower multiple peers.

Skeptics point to the gap between the 94.4x P/E and the DCF fair value as a reason to question how much upside is left in Credo stock if growth normalizes, so if you are weighing the cautious case it helps to see how that argument is built out in detail 🐻 Credo Technology Group Holding Bear Case.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Credo Technology Group Holding on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this mix of strong recent figures and high expectations around Credo Technology Group Holding leaves you on the fence, act quickly. Review the underlying data and narratives yourself, then weigh up the 2 key rewards and 2 important warning signs.

See What Else Is Out There

For all the strong recent figures, Credo Technology Group Holding carries a premium 94.4x P/E and trades above a DCF fair value of about US$150.23. This leaves little room for disappointment if growth or margins soften.

If that rich valuation makes you uneasy about adding more Credo exposure right now, it is worth widening your search to companies screened as 44 high quality undervalued stocks and seeing which stocks currently pair stronger value support with their earnings stories.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.