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Marvell Technology Inc MRVL

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Marvell Begins Fiscal 2022 with a Marvelous Quarter, But Shares Are Still Overvalued

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Marvell Technology kicked off fiscal 2022 with the company’s revenue growing at a healthy clip and clocking in above management’s guidance and our expectations. The firm’s sales were buoyed by continued strength witnessed in the networking and storage segments. We continue to see Marvell as well-placed to capitalize on secular trends in 5G, automotive, data infrastructure, and cloud computing to grow its business. We also view Marvell’s acquisition of Inphi as value-accretive as it enhances the company’s position in the data center space, the firm’s largest vertical by revenue. We will incorporate the firm’s strong guidance along with a modest increase in our midcycle growth assumptions, and we expect to raise our fair value estimate for no-moat Marvell by about 15%-20%. However, with shares up 5% during after-hours trading in the $50 range, we recommend investors wait for a pullback before committing capital to the name.

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Company Profile

Business Description

Marvell Technology designs integrated circuits primarily for data storage, networking, and communications. Historically, the firm focused on storage, where it is still a key supplier to hard-disk drive and solid-state drive makers but has strategically emphasized networking to offset declining HDD technology. The firm has since diversified via acquisitions and supplies chips to the networking and consumer electronic spaces. Marvell outsources its production to third-party foundries.

Contact
31 Victoria Street, Victoria Place, 5th Floor
Hamilton, HM 10
T +1 441 294-8000
Sector Technology
Industry Semiconductors
Most Recent Earnings Jan 31, 2021
Fiscal Year End Jan 29, 2022
Stock Type Cyclical
Employees 5,340

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