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Marvell Technology (MRVL) Gains But Lags Market: What You Should Know

Zacks Equity Research

Marvell Technology (MRVL) closed the most recent trading day at $24.21, moving +0.71% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.73%. Elsewhere, the Dow gained 0.51%, while the tech-heavy Nasdaq added 1.34%.

Prior to today's trading, shares of the chipmaker had lost 12.18% over the past month. This has lagged the Computer and Technology sector's gain of 2.97% and the S&P 500's of 0% in that time.

MRVL will be looking to display strength as it nears its next earnings release. On that day, MRVL is projected to report earnings of $0.16 per share, which would represent a year-over-year decline of 36%. Meanwhile, our latest consensus estimate is calling for revenue of $711.16 million, down 4.52% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.65 per share and revenue of $2.69 billion. These totals would mark changes of -45.38% and -6.04%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for MRVL. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. MRVL is currently a Zacks Rank #4 (Sell).

Valuation is also important, so investors should note that MRVL has a Forward P/E ratio of 37.03 right now. This represents a premium compared to its industry's average Forward P/E of 31.57.

It is also worth noting that MRVL currently has a PEG ratio of 4.87. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor - Communications was holding an average PEG ratio of 3.01 at yesterday's closing price.

The Semiconductor - Communications industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 222, which puts it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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