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Marvell (MRVL) Surges 5.1%: Is This an Indication of Further Gains?

·2 min read

Marvell Technology MRVL shares soared 5.1% in the last trading session to close at $50.73. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.9% gain over the past four weeks.

The upswing came after Marvell reported better-than-expected first-quarter fiscal 2022 results. The company posted non-GAAP earnings of $0.29 per share that beat the Zacks Consensus Estimate of loss of $0.27. Moreover, the reported figure surged 61.1% from the year-ago quarter tally.

Marvell’s revenues of $832.3 million surpassed the consensus mark of $803 million. In addition, the revenue figure increased 20% year over year. 5G and Cloud product ramp-ups, along with revenue contribution from the recently-acquired Inphi Corporation business, were major driving factors.

This chipmaker is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +47.6%. Revenues are expected to be $838.52 million, up 15.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Marvell, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MRVL going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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