Credo Technology Group Holding Ltd: revenue doubled, but shares fell 24.6% after the report

1 сентября 2026 года Credo Technology Group Holding Ltd раскрыла результаты за первый квартал 2027 финансового года (закончился 1 августа 2026). Выручка выросла на 114,7% год к году до 479,0 млн долларов, чистая прибыль – на 104,1% до 129,4 млн долларов. Несмотря на сильные цифры, акции упали на 8,6% в день публикации и ещё на 24,6% к 4 сентября – рынок, видимо, ждал большего от компании, торгующейся по мультипликатору P/E LTM 61,0. На наш взгляд, при текущей цене акции выглядят скорее привлекательно, учитывая потенциал роста по модели портала (+16%) и сохранение высоких темпов.

Key takeaways

— Credo's revenue doubled year-over-year, but growth slowed from 273.6% to 114.7%

— EBITDA margin declined from 29.7% to 27.0% due to higher R&D and selling expenses

— Net profit grew 104.1%, but one-off items distort the picture

— Leverage remains negative: net debt / EBITDA LTM is -2.13

— The company guided next quarter revenue growth of 9.6-11.7% quarter-over-quarter

— Shares fell 24.6% after the report despite strong results

— On the portal's model, the upside potential is +16%

Attractiveness

Key figures, USD bn

Credo's revenue doubled year-over-year, but growth slowed from 273.6% to 114.7%

In the first quarter of fiscal 2027 (ended August 1, 2026), Credo's revenue was $479.0 million, up 114.7% year-over-year. This is the sixth consecutive quarter with growth above 100%, but the pace is slowing: a year ago growth was 273.6%, and the previous quarter it was 157.0%.

Quarter-over-quarter growth was 9.6%, consistent with a deceleration. Nevertheless, the company continues to grow faster than the market, and management expects second-quarter revenue in the range of $525–535 million, implying 9.6–11.7% quarter-over-quarter growth.

EBITDA margin declined from 29.7% to 27.0% due to higher R&D and selling expenses

EBITDA for the first quarter of fiscal 2027 was $129.3 million, up 95.3% year-over-year. However, the EBITDA margin declined from 29.7% to 27.0% – R&D expenses rose to $114.5 million, and SG&A to $73.9 million, both growing faster than revenue.

The margin decline reflects active investments in new products and team expansion. The company is broadening its portfolio for AI infrastructure, which requires spending but has not yet translated into proportional profit growth.

Net profit grew 104.1%, but one-off items distort the picture

Net profit for the quarter was $129.4 million, up 104.1% year-over-year. However, the report shows one-off items: amortization of acquired intangibles of $11.6 million, acquisition and integration costs of $10.4 million, and tax effects of -$3.1 million.

Excluding these items, non-GAAP net profit would have been $236.3 million, up 140% year-over-year. The gap between GAAP and non-GAAP is significant – mainly due to share-based compensation of $88.0 million.

Leverage remains negative: net debt / EBITDA LTM is -2.13

At the end of the quarter, the company's net debt was -$1,139.5 million, meaning cash and short-term investments significantly exceed debt. The net debt / EBITDA ratio for the trailing twelve months is -2.13.

During the quarter, net debt increased by $1.0 billion (in ruble equivalent), but this is related to acquisition spending – goodwill of $986.4 million appeared on the balance sheet. The company remains financially strong and has no liquidity issues.

The company guided next quarter revenue growth of 9.6-11.7% quarter-over-quarter

Credo expects second-quarter fiscal 2027 revenue in the range of $525–535 million, implying 9.6–11.7% growth over the current quarter. This is a continuation of the slowdown: quarterly growth was 9.6% in the first quarter, and previously 7.4% and 52.0%.

The non-GAAP gross margin guidance is 67.0–69.0%, below the current 68.0%. Non-GAAP operating expenses are expected to be $100–105 million, compared to $95.2 million in the reported quarter.

Shares fell 24.6% after the report despite strong results

The share price before the release was $226.19, it fell 8.6% on the release day and 24.6% by September 4. The market is likely disappointed by slowing growth and margin decline, as well as the high valuation: P/E LTM is 61.0, EV/EBITDA LTM is 59.2.

For comparison, the three-year average EV/EBITDA is 108.3, meaning the current multiple is significantly below its own history. This may indicate that the market is already pricing in a slowdown, and upside potential remains.

On the portal's model, the upside potential is +16%

Our value-creation model, based on EBITDA growth and target multiple, shows that the shares have an upside potential of +16% to fair value. This is our own calculation, not a market consensus.

The shares are included in the 'US AI infrastructure' strategy on the portal, reflecting their role in the AI ecosystem. However, this is not an argument for a recommendation – the decision is based on fundamental factors.

Valuation on the latest reported figures

Bottom line

Credo continues to grow at an impressive pace: revenue doubled year-over-year, and the company remains financially strong with negative net debt. However, growth is slowing, margins are declining, and one-off items distort profit. Shares fell 24.6% after the report and now trade at multiples below their own three-year history. According to our model, the upside potential is +16%, making the shares rather attractive at the current price. The key question for holders is whether the company can sustain high growth rates and restore margins as it scales.