Please try another search
© Reuters. Marvell (MRVL) falls on tepid forecast; Needham sees it as a buying chance
By Senad Karaahmetovic
Marvell (NASDAQ:MRVL) shares are trading over 10% lower in pre-market trading after the company issued a worse-than-expected quarter for the quarter.
For the fourth quarter, Marvell reported EPS of $0.46, in line with average analyst estimates, and revenue of $1.42 billion, beating the estimated $1.4B. Net revenue increased by 5.6% year-over-year, despite the 13% drop in Data center revenue.
For this quarter, the company guided to EPS of $0.29 on revenue of $1.3B, signaling a further quarter-over-quarter deceleration. Analysts were looking for EPS of $0.41 on revenue of $1.38B.
"While inventory corrections and resulting changes in product mix are impacting our guidance for fiscal first quarter revenue and gross margin, we expect these headwinds to subside later in fiscal 2024, as inventory levels normalize, and Marvell-specific growth drivers accelerate," said Matt Murphy, Marvell's President, and CEO.
Morgan Stanley analysts highlighted a weakness in the data center business.
"The market clearly expected some headwinds, but weaker gross margins, delays in the custom cloud silicon ramps, and the sense that these factors will linger for the next few quarters are all slight negatives to consider," the analysts said in a client note.
Needham & Company analysts urged clients to buy weakness in MRVL stock as "bad news is mostly out of the way."
"We estimate Marvell will organically grow revenue by >30% in CY22 and by ~20% in CY23, the fastest growth among its large cap peers, driven by new design wins for its 5nm platform, market share gains and increasing supply from its major wafer foundry, substrate and assembly and test partners. As investors rally behind the fastest growing companies, we believe MRVL's valuation multiple should expand," the analysts wrote.
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.