How Smart Investors Look at Marvell Technology (MRVL).

Marvell Technology logged a -3.1% change during today's afternoon session, and is now trading at a price of $57.09 per share.

Over the last year, Marvell Technology logged a 3.0% change, with its stock price reaching a high of $67.99 and a low of $33.75. Over the same period, the stock underperformed the S&P 500 index by -3.0%. As of April 2023, the company's 50-day average price was $61.54. Marvell Technology, Inc., together with its subsidiaries, provides data infrastructure semiconductor solutions, spanning the data center core to network edge. Based in Wilmington, DE, the large-cap Technology company has 7,418 full time employees. Marvell Technology has offered a 0.4% dividend yield over the last 12 months.

Growing Revenues With Increasing Reinvestment in the Business:

2020-01-31 2021-01-31 2022-01-31 2023-01-31
Revenue (MM) $2,699 $2,969 $4,462 $5,920
Gross Margins 50.3% 50.1% 46.3% 50.5%
Operating Margins -7.0% -1.7% -7.1% 6.1%
Net Margins 58.7% -9.34% -9.44% -2.76%
Net Income (MM) $1,584 -$277 -$421 -$164
Net Interest Expense (MM) -$81 -$67 -$139 -$165
Depreciation & Amort. (MM) -$525 -$642 -$1,245 -$1,392
Earnings Per Share $2.34 -$0.41 -$0.53 -$0.19
EPS Growth n/a -117.52% -29.27% 64.15%
Diluted Shares (MM) 676 669 797 860
Free Cash Flow (MM) $274 $698 $632 $1,072
Capital Expenditures (MM) -$87 -$120 -$187 -$217
Net Current Assets (MM) -$917 -$712 -$3,913 -$3,604
Current Ratio 2.16 1.5 1.8 1.37
Long Term Debt (MM) $1,439 $993 $4,485 $3,908
Net Debt / EBITDA 0.58 1.15 4.37 2.18

Marvell Technology has growing revenues and increasing reinvestment in the business, consistent free cash flow, and healthy leverage. However, Marvell Technology has slimmer gross margins than its peers, consistently negative margins with a positive growth rate, and declining EPS growth. Finally, we note that Marvell Technology has just enough current assets to cover current liabilities.

Marvell Technology does not have a meaningful trailing P/E ratio since its earnings per share are currently in the red. Based on its EPS guidance of $2.37, the company has a forward P/E ratio of 26.0. In comparison, the average P/E ratio for the Technology sector is 27.16. On the other hand, the market is undervaluing Marvell Technology in terms of its equity because its P/B ratio is 3.17. In comparison, the sector average is 6.23. In conclusion, Marvell Technology's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.

Analysts Give Marvell Technology an Average Rating of Buy:

The 27 analysts following Marvell Technology have set target prices ranging from $60.0 to $100.0 per share, for an average of $69.8 with a buy rating. As of April 2023, the company is trading -11.8% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Marvell Technology has an average amount of shares sold short because 2.6% of the company's shares are sold short. Institutions own 87.4% of the company's shares, and the insider ownership rate stands at 0.48%, suggesting a small amount of insider investors. The largest shareholder is FMR, LLC, whose 15% stake in the company is worth $7,337,933,404.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.