Credo: Time To Step Aside, Not Stand In Front

James Foord Investing Group Leader Follow Summary Credo is upgraded to Hold ahead of fiscal Q1 earnings, with valuation now more compelling at 36x forward earnings. Guidance for Q1 revenue is $465–$475 million, implying 110% YoY growth and potential for an upside surprise. Optical portfolio momentum and improved customer concentration support the investment case, but growth is decelerating and competition intensifying. I'll monitor gross margins, Q2 guidance for acceleration, and customer mix to reassess after September 1 earnings. Looking for a portfolio of ideas like this one? Members of The Pragmatic Investor get exclusive access to our subscriber-only portfolios. Learn More » Andrii Yalanskyi/iStock via Getty Images Thesis Summary Two months ago, I downgraded Credo ( CRDO ) to a Sell at $269. The stock is now around $226, and the S&P has gained over 4% since then. Now, I see this is a potential This article was written by James Foord 29.56K Followers Follow James Foord is an economist by trade and has been analyzing global markets for the past decade. He leads the investing group The Pragmatic Investor where the focus is on building robust and truly diversified portfolios that will continually preserve and increase wealth. The Pragmatic Investor covers global macro, international equities, commodities, tech and cryptocurrencies and is designed to guide investors of all levels in their journey. Features include a The Pragmatic Investor Portfolio, weekly market update newsletter, actionable trades, technical analysis, and a chat room. Learn more. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.