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Marvell Technology Inc MRVL

Morningstar Rating
$51.31 −1.53 (2.90%)
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Company Report

Marvell Earnings: Cloud and AI Strength Offset Telecom Weakness; Maintain $61 Fair Value Estimate

We maintain our $61 fair value estimate for shares of narrow-moat Marvell Technology after a mixed quarter showed terrific strength in cloud and artificial intelligence networks, but weakness elsewhere. Primarily, Marvell’s carrier infrastructure sales, which are exposed to 5G buildouts, are seeing a drop-off in demand as the firm heads into 2024. In our view, the strength of Marvell’s AI sales should more than offset the weakness in carrier customers. We’ve long liked Marvell’s cloud exposure and its rapid growth resulting from AI has led us to meaningfully raise our forecast for the firm’s data center sales in fiscal 2025, which ends in January 2025. We see Marvell as well positioned to service rising network traffic with its command of the optical chip market and believe it can build momentum with its custom processing chips for hyperscale cloud customers in AI networks. Shares dipped on the weak carrier outlook and we see the stock as modestly undervalued.

Price vs Fair Value

MRVL is trading at a 13% discount.
Price
$52.80
Fair Value
$68.00
Uncertainty
High
1-Star Price
$92.52
5-Star Price
$91.60
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Marvell’s strong position in data processors and optical chips should offer high growth potential in future networking setups in public clouds and 5G networks.

Bears

Marvell remains a distant second to Broadcom in networking chip market share and will face an uphill battle overcoming its customer relationships.

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News

Trading Information

Previous Close Price
$52.84
Day Range
$50.6352.04
52-Week Range
$33.7567.99
Bid/Ask
$51.31 / $51.33
Market Cap
$44.22 Bil
Volume/Avg
6.3 Mil / 8.8 Mil

Key Statistics

Price/Earnings (Normalized)
34.97
Price/Sales
8.24
Dividend Yield
0.45%
Dividend Yield (Forward)
0.45%
Total Yield
0.56%

Company Profile

Marvell Technology is a fabless chip designer focused on wired networking, where it has the second-highest market share. Marvell serves the data center, carrier, enterprise, automotive, and consumer end markets with processors, optical and copper transceivers, switches, and storage controllers.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Large Core
Total Number of Employees
7,448

Competitors

Valuation

Metric
MRVL
AVGO
INTC
Price/Earnings (Normalized)
34.9722.3372.90
Price/Book Value
3.0017.401.81
Price/Sales
8.2410.973.45
Price/Cash Flow
36.9920.6014.12
Price/Earnings
MRVL
AVGO
INTC

Financial Strength

Metric
MRVL
AVGO
INTC
Quick Ratio
1.032.040.97
Current Ratio
1.582.501.53
Interest Coverage
−2.3710.03−4.36
Quick Ratio
MRVL
AVGO
INTC

Profitability

Metric
MRVL
AVGO
INTC
Return on Assets (Normalized)
5.89%25.10%1.08%
Return on Equity (Normalized)
8.44%81.60%1.97%
Return on Invested Capital (Normalized)
7.29%31.74%1.07%
Return on Assets
MRVL
AVGO
INTC

Semiconductors Industry Comparables

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Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
NVDA
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AVGO
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TSM
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Advanced Micro Devices IncKwzjmn$196.1 Bil
INTC
Intel CorpWhxf$184.4 Bil
QCOM
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TXN
Texas Instruments IncYlmt$141.0 Bil
ADI
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MU
Micron Technology IncZbs$83.8 Bil
ARM
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