CRDO
Credo Technology Group Holding Ltd
$216.55
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 236.4% above fair value
You pay
$216.55
Bear
$39.16
Fair
$64.37
Bull
$95.83
Bear
$39.16
-81.9%
12% stage 1 growth, 12% discount
Fair
$64.37
-70.3%
20% stage 1 growth, 12% discount
Bull
$95.83
-55.7%
26% stage 1 growth, 12% discount
Adjust Assumptions
20.0%
12.0%
3.0%
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
144.3x
Market is pricing in (growth)
37.9%
vs 20.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$267.33
Divergence from AlphaVal
76%
Summary
Using a two-stage FCF DCF with 20% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $64.37 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 $267.33 (from 16 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