6 Marvell Technology Analysts On FQ4 Results: 'Near-Term Weakness, Long-Term Opportunity'

Shares of Marvell Technology Inc MRVL plunged in early trading on Friday, after the company reported its fourth-quarter results.

• KeyBanc Capital analyst John Vinh maintained an Overweight, while reducing the price target from $65 to $60.
• Needham analyst Quinn Bolton maintained a Buy rating and price target of $50.
• Oppenheimer analyst Rick Schafer reiterated an Outperform rating and price target of $70.
• Raymond James analyst Srini Pajjuri maintained an Outperform rating, while reducing the price target from $54 to $50.
• Susquehanna analyst Christopher Rolland reiterated a Positive rating, while reducing the price target from $55 to $50.
• Benchmark analyst Cody Acree reaffirmed a Buy rating and price target of $70.

Check out other analyst stock ratings.

KeyBanc Capital Markets

• “MRVL reported mixed F4Q results and guided F1Q lower, indicating the inventory correction in data center and storage seen last quarter has broadened,” Vinh wrote in a note.
• “Accordingly, MRVL indicated customers have pushed out the ramp of cloud-optimized semi-custom silicon projects by a couple quarters, which was expected to generate $400M/$800M in FY24/FY25,” the analyst said. “We are disappointed with these results, but view the pullback as a buying opportunity."

Needham

• “MRVL guided NG GM down ~350bps Q/Q to ~60%, which we see as the main reason for after-market share price weakness,” Bolton said. “GM headwinds include declining sales in merchant enterprise networking, storage, and optical DSP ICs (all are high-GM and affected by inventory corrections) and increasing sales of lower margin 5G wireless and custom ASIC solutions."
• The company’s inventory corrections “are proving to be deeper for longer,” the analyst further stated.

Oppenheimer

• “Enterprise storage continues to lead weakness though mgmt noted some transitory, macro-impacted DC inventory excess and project push-outs,” Schafer said.
• “We attribute softness to transitory macro/cycle pressure and expect a 2H rebound,” the analyst wrote. “MRVL’s emergent growth story, led by content/ share gains in cloud, 5G and auto are intact, we view any near-term share weakness as a long-term opportunity."

Raymond James

• “MRVL’s FQ1 outlook was weaker than we modeled, which was not entirely surprising,” Pajjuri wrote in a note “However, weaker gross margin outlook and the delay in cloud-optimized product ramp were unexpected,” he added.
• “While we are disappointed by FQ1 outlook, we are not overly concerned about temporary margin hiccups,” the analyst explained.

Susquehanna

• “Marvell announced slightly better results but disappointing guidance as all segments besides Enterprise Carrier, but particularly DC, were guided weaker,” Rolland said.
• “Marvell is now undergoing a multi-quarter inventory correction like many of its peers and will have to wait until later this year for inventory levels normalize,” he added.

Benchmark

• Marvell’s expected sequential and annual decline in Q1 revenue is a valid near-term concern, Benchmark believes Marvell is well positioned with "multiple company-specific drivers, such as its ramp of new cloud-optimized silicon design wins, further global 5G adoption, and a wide swath of OEM wins in Automotive Ethernet applications."
• That should help the company ride through the industry’s cyclical correction and position the company to participate in the current AI industry adoption, Acree explained.

MRVL Price Action: Shares of Marvell Technology had declined by 7.40% to $42.81 at the time of publication Friday.