Marvell Technology (MRVL) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3-min read

Marvell Technology (MRVL) closed at $52.62 in the latest trading session, marking a -1.63% move from the prior day. This change lagged the S&P 500's daily loss of 0.3%. Elsewhere, the Dow lost 0.57%, while the tech-heavy Nasdaq added 0.09%.

Coming into today, shares of the chipmaker had gained 13.69% in the past month. In that same time, the Computer and Technology sector gained 6.16%, while the S&P 500 gained 4.43%.

Wall Street will be looking for positivity from MRVL as it approaches its next earnings report date. On that day, MRVL is projected to report earnings of $0.29 per share, which would represent year-over-year growth of 70.59%. Meanwhile, our latest consensus estimate is calling for revenue of $786.17 million, up 9.55% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.93 per share and revenue of $2.96 billion. These totals would mark changes of +40.91% and +9.56%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for MRVL. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.17% higher. MRVL currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, MRVL is holding a Forward P/E ratio of 57.71. For comparison, its industry has an average Forward P/E of 57.71, which means MRVL is trading at a no noticeable deviation to the group.

Also, we should mention that MRVL has a PEG ratio of 2.96. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. MRVL's industry had an average PEG ratio of 3.82 as of yesterday's close.

The Semiconductor - Communications industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 131, which puts it in the bottom 49% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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