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Why Is Marvell (MRVL) Up 23.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Marvell Technology (MRVL - Free Report) . Shares have added about 23.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Marvell due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Marvell Q4 Earnings Meet Estimates

Marvell Technology Group delivered fourth-quarter fiscal 2021 non-GAAP earnings of 29 cents, in line with the Zacks Consensus Estimate. Moreover, the reported figure surged 70.6% from the year-ago quarter’s figure.

Marvell’s revenues of $798 million surpassed the consensus mark of $786 million. In addition, the revenue figure increased 11.2% year over year. 5G and Cloud product ramp-ups were a major driving factor.

Quarter Details

In the end markets, storage revenues (41% of total revenues) grew 10% year over year to $326.4 million.

The networking business (55%) revenues fell 1% year on year to $438.6 million.

Other product revenues (4%) during the fiscal fourth quarter grew 13% on a year-over-year basis to $32.8 million.

Notably, total core business constituted 96% of total revenues and increased 6% year over year to $765 million.

Marvell’s non-GAAP gross margin expanded 160 basis points (bps) to 63.9%. Non-GAAP operating expenses declined 7.5% year over year to $283.2 million. Non-GAAP operating margin expanded 880 bps year on year to 28.4%.

Marvell exited the reported quarter with cash and cash equivalents of $748 million compared with the previous quarter’s $832 million. The company’s long-term debt totaled $993.2 million.

The firm generated cash from operating activities of $158.3 million during the fiscal fourth quarter and $817.3 million in fiscal 2021. Marvell returned $40.5 million and $160.6 million to shareholders through dividend payments during the quarter and full year, respectively.

Full-Year Highlights

For fiscal 2021, total revenues came in at $3 billion, up 10% year over year. Non-GAAP earnings of 92 cents per share were up 39.4%.

Guidance

Marvell's guidance for the first quarter of fiscal 2022 takes into account the U.S. government's export restriction on certain Chinese customers. The company has temporarily widened the guided range for revenues due to the uncertainties associated with the coronavirus crisis.

The company projects first-quarter fiscal revenues of $800 million (up or down up to 5%). The Zacks Consensus Estimate for revenues is pegged at $784.1 million, suggesting growth of 13.04% from the year-ago quarter.

Non-GAAP earnings per share are expected between 23 cents and 31 cents. The consensus mark of 27 cents indicates a 50% year-over-year surge.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, Marvell has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Marvell has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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