Marvell Technology, Inc. - NASDAQGS:MRVL - Comprehensive analysis
Marvell Technology is one of our top picks in the networking semiconductor sector, currently trading at an attractive discount to our $90 fair value estimate. We view Marvell as a long-term leader in artificial intelligence infrastructure, driven by its custom accelerator chip designs for clients such as Amazon and Microsoft, as well as its optical connectivity chips, where it stands out as best in class. This strong positioning is supported by valuable intangible assets in chip design, which we believe will fuel robust long-term growth. As of May 30, Marvell's stock has declined 40% year to date, largely due to market concerns regarding potential share losses in its custom accelerators. We believe these concerns are exaggerated. Marvell's involvement in Amazon's Trainium chips and Microsoft's Maia chips is expected to remain strong, contributing to the company's overall growth. While we anticipate some multi-sourcing with competitors like Alchip or GUC, we consider these firms to be design consultancies rather than full-fledged chip designers like Marvell. We believe Marvell's strong core intellectual property will maintain its status as a preferred supplier for these custom chip clients, even as they engage Alchip for certain production aspects. We do not view multi-sourcing as a concern; rather, we see it as a strategic approach for customers to mitigate vendor lock-in and diversify their supply chains in a constrained supply environment. Our projections are not dependent on Marvell being the sole supplier for these chip programs or securing new contracts, but rather on the growth of the existing programs in which Marvell is involved, which we expect to continue into future generations. We anticipate a positive catalyst for Marvell in June 2025, when the company will host a custom AI chip webinar to provide further insights into its customer engagements and technology. We also expect sustained strong growth through calendar 2025, which should gradually alleviate investor concerns that have impacted the stock.
Free evaluation through quantitative algorithms Marvell Technology, Inc. - NASDAQGS:MRVL
Growth-Scoring Model Detail
Total Revenue Growth Over Prior Year | 21.6 | Market 94 Sector 79 |
Gross Profit Growth Over Prior Year | 39.6 | Market 98 Sector 90 |
EBITDA Growth Over Prior Year | 89 | Market 99 Sector 88 |
EBITA Growth Over Prior Year | 93 | Market 98 Sector 87 |
EBIT Growth Over Prior Year | 0 | Market 0 Sector 0 |
Earnings from Cont. Ops. Growth Over Prior Year | 0 | Market 0 Sector 0 |
Net Income Growth Over Prior Year | 0 | Market 0 Sector 0 |
Normalized Net Income Growth Over Prior Year | 0 | Market 0 Sector 0 |
Diluted EPS before Extra Growth Over Prior Year | 0 | Market 0 Sector 0 |
A/R Growth Over Prior Year | 29.7 | Market 93 Sector 82 |
Inventory Growth Over Prior Year | 29.6 | Market 98 Sector 94 |
PPE Net Growth Over Prior Year | -19.44 | Market 4 Sector 18 |
Total Assets Growth Over Prior Year | -2.28 | Market 20 Sector 33 |
Tangible Book Value Growth Over Prior Year | 0 | Market 0 Sector 0 |
Common Equity Growth Over Prior Year | -8.05 | Market 14 Sector 25 |
Cash from Ops. Growth Over Prior Year | 13.66 | Market 67 Sector 55 |
CAPEX Growth Over Prior Year | -4.91 | Market 31 Sector 41 |
Dividend per Share Growth Over Prior Year | 0 | Market 36 Sector 46 |
Levered Free Cash Flow Growth Over Prior Year | -30.49 | Market 13 Sector 14 |
Unlevered Free Cash Flow Growth Over Prior Year | -28.25 | Market 12 Sector 14 |
Profitability-Scoring Model Detail
Gross Margin % | 48.6 | Market 57 Sector 46 |
SG&A Margin % | 12.07 | Market 45 Sector 12 |
EBITDA Margin % | 26.8 | Market 56 Sector 88 |
EBITA Margin % | 23.9 | Market 66 Sector 91 |
EBIT Margin % | 6.06 | Market 10 Sector 60 |
Earnings from Cont. Ops Margin % | -7.56 | Market 3 Sector 36 |
Net Income Margin % | -7.56 | Market 3 Sector 35 |
Net Income Avail. for Common Margin % | -7.56 | Market 3 Sector 36 |
Normalized Net Income Margin % | 2.12 | Market 7 Sector 57 |
Levered Free Cash Flow Margin % | 15.66 | Market 66 Sector 67 |
Unlevered Free Cash Flow Margin % | 17.48 | Market 67 Sector 70 |
Return on Assets % | 1.22 | Market 8 Sector 58 |
Return on Capital % | 1.35 | Market 9 Sector 56 |
Return on Equity % | -3.54 | Market 3 Sector 49 |
Return on Common Equity % | -3.54 | Market 4 Sector 49 |
Total Asset Turnover | 0.32 | Market 29 Sector 20 |
