CRDOCredo Technology Group Holding Ltd
Is the business good?
A genuinely good business: earnings fully cash-backed (1.0×), margins widening, and elite returns on assets.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 19% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is CRDO?
Credo Technology Group Holding Ltd earns 20% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 11 points above what the capital costs: growth creates value
- Operating margin
- 32%
Operating margin · Semiconductors median 7.5% · 12 months to Q1 2027
- Cash conversion
- 0.99×
Cash conversion · 1.16× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +5.3%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2021 | −43% |
| FY2022 | −21% |
| FY2023 | −12% |
| FY2024 | −19% |
| FY2025 | 8.5% |
| FY2026 | 33% |
Details›
- Gross margin12 months to Q1 2027
- 67%
- Operating margin12 months to Q1 2027
- 32%
- Net margin12 months to Q1 2027
- 34%
- Free cash flow margin
- 28%
- R&D as % of revenue
- 21%
- Revenue, trailing twelve months
- $1.59B
- Free cash flow, trailing twelve months
- $439M
- Net income, trailing twelve months
- $538M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 20%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.