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Marvell Technology (MRVL) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Marvell Technology (MRVL) closed the most recent trading day at $28.49, moving +0.85% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.39%. At the same time, the Dow added 0.17%, and the tech-heavy Nasdaq gained 0.34%.

Coming into today, shares of the chipmaker had gained 8.45% in the past month. In that same time, the Computer and Technology sector gained 6.58%, while the S&P 500 gained 4.73%.

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, the Zacks Consensus Estimate for revenue is projecting net sales of $711.16 million, down 4.52% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.65 per share and revenue of $2.69 billion, which would represent changes of -45.38% and -6.04%, respectively, from the prior year.

Any recent changes to analyst estimates for MRVL should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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 remained stagnant. MRVL is currently a Zacks Rank #4 (Sell).

Looking at its valuation, MRVL is holding a Forward P/E ratio of 43.52. Its industry sports an average Forward P/E of 36.17, so we one might conclude that MRVL is trading at a premium comparatively.

Meanwhile, MRVL's PEG ratio is currently 5.73. 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. Semiconductor - Communications stocks are, on average, holding a PEG ratio of 3.31 based on yesterday's closing prices.

The Semiconductor - Communications industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 196, putting it in the bottom 24% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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