Credo Technology Group Holding Ltd CRDO is an emerging cloud networking specialist that estimates its addressable market to grow at a compounded annual growth rate (CAGRA) of nearly 49%, according to BofA Securities.
The Credo Technology Analyst: Vivek Arya initiated coverage of Credo Technology with a Buy rating and a price target of $20.
The Credo Technology Thesis: The company projects its sales to outpace the market growth, at a rate of 65% CAGR and reach nearly $400 million by 2024, Arya said in the initiation note.
Credo Technology expects to maintain a strong gross margin profile of 63% to 65%, the analyst mentioned.
He added that the company has strong relationships with leading networking partners, such as Arista Networks Inc ANET, Cisco Systems Inc CSCO and Intel Corporation INTC, and cloud partners such as Microsoft Corporation MSFT and Amazon.com, Inc. AMZN.
Credo Technology also has the “ability to license and extend the technology into adjacent consumer markets, and into emerging USB and PCIe standards that can enable an additional $3bn TAM over time,” Arya wrote.
CRDO Price Action: Shares of Credo Technology had risen by 3.09% to $15.67 at the time of publication Tuesday morning.
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