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Marvell Technology: “Game-Changing” Earnings Call Suggests Upside
Stock Analysis & Ideas

Marvell Technology: “Game-Changing” Earnings Call Suggests Upside

Marvell Technology (MRVL) offers data infrastructure semiconductor solutions spanning the compute, networking, security, and storage segments. I am bullish on the stock. (See Analysts’ Top Stocks on TipRanks)

In the proliferating data economy, microchips are in short supply but in high demand. However, so are other technology components and services which revolve around those chips.

That’s where Marvell Technology comes into play. MRVL stock is among the most diversified chip-centered assets you could possibly own, as the company’s product lineup is replete with practically everything from automotive transceivers, bridges, and switches to ethernet controllers and adapters.

The good news is that you don’t have to be extremely tech-savvy to appreciate Marvell’s value to its shareholders. In light of a terrific earnings call – and with some analyst-driven insights – we can all marvel at Marvell Technology’s progress.

A Watershed Quarter

December 3, 2021, was a great day for Marvell Technology and its investors. MRVL stock surged more than 17% on that day, marking its best day since 2008.

This might seem like a counterintuitive result, given Marvell’s third-quarter fiscal data, which had been issued the previous day.

During that quarter, Marvell recorded an earnings loss of $62.5 million, or eight cents per share. That’s certainly worse than the $22.9 million loss, or three cents per share, from the year-earlier quarter.

That’s not the end of the story, however. As it turned out, Marvell posted Q3 2021 adjusted earnings (excluding stock-based compensation expenses and other items) of 43 cents per share, easily outpacing the 25 cents a share reported in the year-ago period.

Not only that, but the company’s revenue in Q3 2021 increased to $1.21 billion, compared to the year-ago quarter’s revenue of $750.1 million. Hence, it’s easy to see why Cowen & Co. analyst Karl Ackerman would call this a “watershed quarter” for Marvell Technology.

A Game-Changing Conference Call

Oftentimes, conference calls can be uninspiring and uneventful. This wasn’t the case with Marvell Technology’s Q3 2021 conference call, though.

Mizuho analyst Jordan Klein actually went so far as to characterize this conference call as “one of the best (if not the best)… calls I have listened to in quite some time.”

Klein’s effusive praise didn’t end there. “In fact, it was a GAME-CHANGER for investors and, in my view, squarely positions Marvell as a best-in-class GROWTH SEMI into CY22,” the analyst continued.

It’s not every day that you’ll find a respected analyst using all-caps like this. Clearly, Klain found something encouraging in that particular conference call.

Perhaps it was Marvell Technology CFO Jean Hu’s projection of “continued strong demand across our end markets and improvement in supply to drive our top-line revenue growth above 30% in Fiscal 2023.”

Also, it could have been Marvell’s January-quarter revenue forecast, which suggested growth of at least 60% – potentially game-changing, indeed.

Wall Street’s Take

Turning to Wall Street, MRVL comes in as a Strong Buy, based on 23 Buys and two Hold ratings. The average Marvell Technology price target is $100.56, implying 12.5% upside potential.

The Takeaway

You can choose to own MRVL stock because the company really knocked it out of the park with a tremendous conference call.

Alternatively, you can be bullish on the stock because so many Wall Street analysts are giving it Strong Buy ratings and sometimes effusive praise as well.

Still, at the end of the day, you have to decide what’s right for your portfolio. After seeing what may be in store for Marvell Technologies, however, a long position in the stock will be hard to resist.

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Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates  Read full disclaimer >

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