Marvell Stock Soars on Upbeat Earnings, Strong Outlook

Marvell Technology Group (NASDAQ:MRVL) stock rose 6% in extended trading on Thursday following its results for the first quarter of fiscal 2021. Notably, the quarter ended on May 2. The semiconductor company reported better-than-expected results in the first quarter despite coronavirus fears. Marvell’s top-line and bottom-line numbers beat analysts’ consensus expectations. The company also provided strong second-quarter guidance.

Marvell’s Q1 earnings results

In the first quarter, Marvell reported an adjusted EPS of $0.18 compared to $0.16 in the first quarter of fiscal 2020. The adjusted EPS beat analysts’ consensus estimate of $0.14. Marvell generated sales of $693.6 million—a growth of 4.7% from the first quarter of fiscal 2020. The technology company beat analysts’ consensus revenue expectation of $679.7 million.

In the first-quarter earnings report, Marvell CEO Matt Murphy said, “In a challenging environment, solid execution by the Marvell team drove strong first quarter financial results with disciplined operating expense management, healthy operating cash flow, and revenue above the mid-point of guidance, enabled by stronger demand for our networking products from the datacenter and 5G infrastructure end markets.” Murphy added, “While we did experience some COVID-19 supply chain impacts on our storage business in the first quarter, we expect a bounce back in the second quarter and we project our networking business to continue to grow.”

Marvell expects its second-quarter revenues to be $720 million, plus or minus 5%. However, analysts expected lower revenues of $703.8 million for the second quarter—up by 7.2% YoY (year-over-year). The company also expects an adjusted EPS of $0.17–$0.23 for the second quarter. Meanwhile, analysts expect $0.18 per share in the upcoming quarter—a rise of 12.5% YoY.

Analysts expect Marvell’s revenues to rise by 10.4% YoY in fiscal 2021 to $3.0 billion. The sales could rise by 16.4% YoY in fiscal 2022 to $3.5 billion. The adjusted EPS will likely rise by 34.8% YoY in fiscal 2021 to $0.89. However, the profits could rise by 55.1% YoY to $1.38 per share in fiscal 2022.

Analysts’ recommendations and target price

Among the 27 analysts following Marvell stock, 22 recommend a “buy,” four recommend a “hold,” and one recommends a “sell.” Wall Street analysts’ mean target price on the stock is $33.43, which implies an 11.5% gain from the current level of $29.97. The consensus target price for the stock has risen from $28.83 in April—a growth of 16%.

Many analysts revised their target price for Marvell stock after its first-quarter earnings report.

  • Piper Sandler increased its target price from $32 to $35.
  • Oppenheimer increased its target price from $30 to $35.
  • Evercore ISI increased its target price from $32 to $38.
  • Rosenblatt Securities increased its target price from $32 to $42.
  • J.P. Morgan increased its target price from $31 to $36.
  • Susquehanna increased its target price from $35 to $36.
  • Wells Fargo increased its target price from $32 to $35.
  • BMO increased its target price from $25 to $30.
  • Stifel increased its target price from $32 to $35.
  • Needham increased its target price from $28 to $34.
  • Deutsche Bank increased its target price from $30 to $40.

Stock returns

Marvell stock fell 2.4% on Thursday and ended the day at $29.97. At this closing price, the company’s market cap is $19.9 billion. Notably, the stock is trading 6.3% below its 52-week high of $32.00 and 82.2% above its 52-week low of $16.45.

Based on the closing price on Thursday, Marvell stock was trading 9.2% above its 20-day moving average of $27.45. The stock is also trading 18.8% above its 50-day moving average of $25.22 and 20.6% above its 100-day moving average of $24.86. Marvell’s 14-day relative strength index number is 67, which indicates that it’s approaching the overbought zone.

Marvell stock has a middle Bollinger Band level of $27.45, while its lower Bollinger Band level is $24.06. On Thursday, Marvell stock closed near its upper Bollinger Band level of $30.84, which indicates that it’s overbought.

On Thursday, NVIDIA (NASDAQ:NVDA), Advanced Micro Devices (NYSE:AMD), and Intel (NASDAQ:INTC) stocks lost 0.45%, 1.90%, and 2.93%, respectively.

Marvell stock rose 5.2% in pre-market today at 6:39 AM ET. The S&P 500 futures fell 0.25%, while the Dow futures fell 0.35%. To learn more, read COVID-19’s Impact on the Global and US Economy.