CRDO
Credo Technology Group Holding Ltd
$207.97
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 79.6% above fair value
You pay
$207.97
Bear
$70.45
Fair
$115.80
Bull
$172.40
Bear
$70.45
-66.1%
12% stage 1 growth, 12% discount
Fair
$115.80
-44.3%
20% stage 1 growth, 12% discount
Bull
$172.40
-17.1%
26% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
138.4x
Market is pricing in (growth)
37.3%
vs 20.0% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $270.10 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $115.80 per share.
Warnings
Stock-based employee pay equals 39% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $270.10 (from 15 analysts). Our estimate is 76% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions