CREDO TECHNOLOGY GROUP HOLDI (NASDAQ:CRDO) Shows Strong Alignment with Louis Navellier's Growth Strategy

A growth investing approach described in Louis Navellier's "The Little Book That Makes You Rich" uses eight specific fundamental measures to find companies with better growth prospects. This method concentrates on earnings revisions, positive surprises, quickening sales and earnings growth, widening margins, good cash flow, and high returns on equity. The plan intends to seize stocks showing fundamental momentum ahead of wider market awareness.

Meeting the Little Book Criteria

Credo Technology Group Holding Ltd (NASDAQ:CRDO) shows good alignment with several measures from Navellier's plan, making a solid case for growth investors.

• Positive Earnings Revisions: Analysts have raised their next-quarter EPS estimates by 30.95% over the last three months, showing more confidence in short-term results. This upward change is important as it frequently comes before actual earnings that beat estimates.
• Positive Earnings Surprises: The company has exceeded analyst predictions in all of its last four quarterly reports, with an average surprise of 32.04%. Regular beats make analysts constantly update their models, which could lead to future estimate rises.
• Quickening Growth Measures:
  • Sales grew 273.57% quarter-over-quarter and 175.81% year-over-year.
  • EPS grew 1200% quarter-over-quarter and 643.75% year-over-quarter. This shows strong operational momentum, a central idea of the plan that looks for companies that are not only growing, but speeding up.
• Widening Operating Margins: The operating margin has widened by 212.89% over the last year. This indicates the company is effectively turning its large revenue growth into even quicker profit growth, enhancing operational effectiveness.
• Good Cash Flow: Free cash flow jumped by 1078.72% in the past year. Solid and increasing cash creation offers financial freedom to fund future growth projects without needing outside money.
• High Return on Equity: The company keeps a good ROE of 16.01%. This fits the plan's need for high ROE, showing effective use of shareholder money to produce profits.

Fundamental Health Overview

The full fundamental analysis report for CRDO gives it an overall score of 6 out of 10. The company displays outstanding financial condition with no debt and good liquidity ratios, placing it well for future investments. Its profitability is scored as average, but important margins are notable and do better than most industry competitors. Although the stock seems costly on standard price-to-earnings measures, this is partly reasonable given its very fast growth profile, with earnings predicted to grow more than 43% each year in the near future.

For a detailed look at CRDO's financial position, you can examine the complete fundamental analysis report.

Investment Considerations

For investors using the Little Book method, CRDO represents a solid candidate based on its fit with main growth ideas. The company is showing outstanding momentum in sales, earnings, and cash flow creation while keeping high returns on equity. The mix of major earnings estimate changes and steady earnings surprises implies underlying strength could be outpacing visible forecasts. While valuation measures seem high, the plan suggests such high prices can be acceptable for companies displaying this degree of fundamental speed-up.

Investors looking for other companies that fit these strict growth measures can check the live screening results based on Louis Navellier's strategy.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.