Marvell Technology shares fell by -1.6% during the day's morning session, and are now trading at a price of $60.31. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
Marvell Technology Has an Attractive P/B Ratio but a Worrisome P/E Ratio:
Marvell Technology, Inc., together with its subsidiaries, provides data infrastructure semiconductor solutions, spanning the data center core to network edge. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 35.0 and an average price to book (P/B) ratio of 7.92. In contrast, Marvell Technology has a trailing 12 month P/E ratio of -92.8 and a P/B ratio of 3.42.
Marvell Technology's PEG ratio is 3.31, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
Increasing Revenues but Narrowing Margins:
| 2021 | 2022 | 2023 | |
|---|---|---|---|
| Revenue (MM) | $2,969 | $4,462 | $5,919,600 |
| Revenue Growth | n/a | 50.3% | 132555.07% |
| Operating Margins | -9% | -8% | 0% |
| Net Margins | -9% | -9% | 100% |
| Net Income (MM) | -$277 | -$421 | $5,919,600 |
| Net Interest Expense (MM) | $69 | $139 | -$153 |
| Depreciation & Amort. (MM) | $96 | $266 | $305 |
| Earnings Per Share | -$0.41 | -$0.53 | $851.4 |
| EPS Growth | n/a | -29.27% | 160741.51% |
| Diluted Shares (MM) | 829 | 858 | 861 |
| Free Cash Flow (MM) | $710 | $650 | $1,083 |
| Capital Expenditures (MM) | $107 | $169 | $206 |
| Current Ratio | 1.81 | 1.31 | 1.03 |
| Total Debt (MM) | $4,557 | $4,575 | $4,738 |
| Net Debt / EBITDA | -24.82 | -47.08 | 11.06 |
Marvell Technology has growing revenues and increasing reinvestment in the business, exceptional EPS growth, and irregular cash flows. However, the firm suffers from consistently negative margins with a negative growth trend and a highly leveraged balance sheet.
