Credo Technology Group Holding Ltd (CRDO)
Quantitative Summary
DeterministicCRDO trades at 82.7x earnings — a 38% premium to its sector average of 60.0x — without a dominant ROIC-WACC spread. Financial health metrics are strong: Piotroski 7/9, Altman Z 100.1 (above 3.0 safe zone threshold). DCF fair value of $28 implies 86% downside based on model assumptions. Beneish M-Score of 0.06 exceeds the -2.22 academic threshold — earnings quality may warrant further review.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe company's fundamental economics present a stark dichotomy between explosive top-line expansion and inefficient capital allocation. While revenue surged 126.3% year-over-year, supported by robust gross margins of 64.8%, the return on invested capital sits at just 4.3%, significantly trailing the cost of equity implied by a WACC of 21.0%. This results in a negative ROIC-WACC spread of -16.8%, indicating that current operations are destroying value despite generating an ROE of 7.7% driven primarily by leverage rather than organic margin expansion or asset efficiency. Credit and earnings quality metrics remain resilient, with a Piotroski F-Score of 7/9, an Altman Z-Score of 91.5 suggesting low bankruptcy risk, and a Beneish M-Score of -1.47 pointing to clean financial statements; however, the profitability factor (RMW) registers at -0.856, highlighting that current earnings power does not yet reflect the scale of revenue growth.
Valuation multiples currently align closely with sector peers, trading at 55.7x P/E versus a technology sector average of 57.8x, suggesting the market has priced in significant future expansion rather than current cash flows. This optimism is reflected in the implied ten-year free cash flow growth assumption of 50%, which drives a DCF fair value estimate of $3 per share—a level implying nearly -96% downside from recent pricing levels. The disconnect between the high revenue velocity and the negative capital efficiency spread creates substantial valuation risk, as the market appears to be betting on sustained margin improvement that has not yet materialized in returns on invested capital.
Risk-adjusted performance data reveals a complex picture where short-term momentum diverges sharply from long-term value drivers. Although the stock exhibits an unusually high Fama-French alpha of 74.28% annually, indicating strong outperformance relative to its factor exposures recently, this is counterbalanced by a negative growth tilt (HML: -1.533) and weak profitability signals. Furthermore, insider activity over the last ninety days shows net selling totaling approximately $50.9 million, which contrasts with the aggressive revenue trajectory and raises questions about whether internal stakeholders perceive the current valuation as fully justified given the capital efficiency constraints.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 206% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 22.2% | 24.2% | 26.2% |
|---|---|---|---|
| 2% | $30 | $28 | $26 |
| 3% | $31 | $28 | $26 |
| 4% | $32 | $29 | $27 |
Center = base case. Green = >10% upside, Red = >10% downside vs $202.68.
Pre-computed DCF: WACC=24.2%, terminal growth 3%. Fair value $28 (-86.0%). Not investment advice.
Valuation Context
Currently trading 190% above its 5-year average P/E of 28.5x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedCredo Technology Group Holding Ltd is currently trading at $156.27, a level that requires contextualization against its moving average envelope to assess relative positioning. Without specific upper and lower band values or the historical volatility range defining this envelope, it remains ambiguous whether the current price resides in a compressed zone near the mean or an extended area far from central tendency. If the stock were significantly elevated above the long-term average within such an envelope structure, the setup would theoretically suggest a higher probability of subsequent correction toward fairness rather than immediate continuation. Conversely, if the price sits deeply depressed relative to these dynamic bands, it might indicate potential for reversion upward as statistical norms exert pressure. The absence of precise band boundaries prevents a definitive judgment on mean-reversion strength at this exact moment. Technical analysis relying on standard deviation envelopes often highlights extremes where prices deviate sharply from historical averages; in such scenarios, the mathematical likelihood of regression increases simply because extreme deviations are statistically unsustainable over time. For Credo specifically, determining if $156.27 represents a statistical outlier or a consolidation point depends entirely on the width and slope of the surrounding envelope lines derived from its recent price history. Observers might look for divergences between momentum indicators and these mean-reversion signals to gauge whether the current valuation is overextended in either direction relative to its established trend channels.
Quant Health Deep Dive
Profitability & Value Creation
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XSD or VBK, the fund manager is mechanically forced to buy or sell CRDO shares regardless of Credo Technology Group Holding Ltd's individual fundamentals. We estimate $3.5B of passive capital is structurally linked to CRDO through 8 tracked ETFs. Index rebalances and ETF creation/redemption cycles can create noticeable volume spikes unrelated to company news.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Credo Technology Group Holding Ltd to visualize passive redemption contagion across ETFs and collateral stocks.
If Credo Technology Group Holding Ltd (CRDO) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies IMPINJ INC (PI) as the most exposed collateral stock, sharing 1 ETFs with CRDO. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 14 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
CRDO Ownership Dynamics
Passive funds hold 1 in every 11 CRDO shares, reducing daily market volatility.
Credo Technology Group Holding Ltd (CRDO) exerts measurable gravity on the passive index market, currently representing 2.3% of the XSD (XSD) and 1.2% of the VBK (VBK). Across 14 tracked ETFs, approximately 16M shares (8.7% of float) are held by passive funds and rarely trade on the open market. As passive ownership grows, index inclusion changes may increasingly drive price discovery.
ETFs with Highest CRDO Exposure
Float lock-up computed from 14 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
CRDO Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Credo Technology Group Holding Ltd over the past year sits near $148.75 (12% of 252-day volume). The current price of $202.68 trades 36.3% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (12% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
CRDO Capital Efficiency
How efficiently does Credo Technology Group Holding Ltd convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Credo Technology Group Holding Ltd converts 85% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. However, the ROIC-WACC spread is negative (-7.4%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-06-12 | 2,816 | $264.76 | $745,564.16 |
| 2026-06-11 | 93 | $237.68 | $22,104.24 |
| 2026-06-10 | 3,336 | $234.32 | $781,691.52 |
| 2026-06-09 | 5,318 | $222.27 | $1.2M |
| 2026-06-08 | 300 | $206.89 | $62,067 |
| 2026-06-04 | 150 | $214.60 | $32,190 |
| 2026-06-01 | 100 | $236.03 | $23,603 |
| 2026-05-26 | 2,038 | $218.41 | $445,119.58 |
| 2026-05-22 | 3 | $193.39 | $580.17 |
| 2026-05-21 | 2 | $182.98 | $365.96 |
| 2026-05-18 | 1,813 | $172.17 | $312,144.21 |
| 2026-05-15 | 2 | $184.54 | $369.08 |
| 2026-05-11 | 100 | $188.51 | $18,851 |
| 2026-05-05 | 36 | $180.06 | $6,482.16 |
| 2026-05-04 | 1,534 | $184.38 | $282,838.92 |
| 2026-04-30 | 22 | $175.77 | $3,866.94 |
| 2026-04-29 | 1,539 | $165.92 | $255,350.88 |
| 2026-04-27 | 1,139 | $195.04 | $222,150.56 |
| 2026-04-20 | 4,776 | $160.69 | $767,455.44 |
| 2026-04-16 | 828 | $168.35 | $139,393.8 |
| 2026-04-14 | 1 | $134.36 | $134.36 |
| 2026-04-13 | 388 | $119.59 | $46,400.92 |
| 2026-04-09 | 9 | $110.21 | $991.89 |
| 2026-04-06 | 615 | $101.45 | $62,391.75 |
| 2026-04-01 | 165 | $93.87 | $15,488.55 |
| 2026-03-30 | 10 | $95.24 | $952.4 |
| 2026-03-27 | 35 | $96.44 | $3,375.4 |
| 2026-03-26 | 1 | $103.91 | $103.91 |
| 2026-03-23 | 50 | $103.40 | $5,170 |
| 2026-03-17 | 9,156 | $116.88 | $1.1M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| GVMXX | NaN | NaN | |
| MGMXX | NaN | NaN | |
| KYG254571055 | 1.000 | 1.000 | High co-movement |
| ALAB | 0.618 | 0.670 | Moderate |
| AVGO | 0.538 | 0.478 | Moderate |
| BE | 0.521 | 0.551 | Moderate |
| TSM | 0.475 | 0.454 | Moderate |
| RMBS | 0.473 | 0.487 | Moderate |
| APH | 0.472 | 0.453 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare CRDO to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-07-17.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.