Credo Technology Group Holding Ltd (NASDAQ: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 (NYSE:ANET), Cisco Systems Inc (NASDAQ:CSCO) and Intel Corporation (NASDAQ:INTC), and cloud partners such as Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ: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.
Photo: Gerd Altmann via Pixabay
