Marvell Technology's Q4 Had 'More Bad Than Good': 7 Analysts Explore Earnings As Shares Slip

Shares of Marvell Technology Inc MRVL declined by 9.35% to $77.13 at the time of publication on Friday, after the company reported its fourth-quarter results and issued disappointing guidance.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

• Stifel analyst Tore Svanberg reaffirmed a Buy rating, while raising the price target from $72 to $86.
• Cantor Fitzgerald analyst C.J. Muse reiterated an Overweight rating, while raising the price target from $80 to $85.
• KeyBanc Capital Markets analyst John Vinh reaffirmed an Overweight rating, while lifting the price target from $70 to $95.
• Goldman Sachs analyst Toshiya Hari maintained a Buy rating, while bumping the price target from $70 to $84.
• Needham analyst Quinn Bolton reaffirmed a Buy rating, while raising the price target from $65 to $95.
• JPMorgan analyst Harlan Sur maintained an Overweight rating, while lifting the price target from $70 to $90.
• Oppenheimer analyst Rick Schafer reiterated an Outperform rating and price target of $80.

Check out other analyst stock ratings.

Stifel: Marvell Technology reported in-line quarterly results, on continued data center growth, Svanberg said in a note. He added, however, that the guidance was “materially lower” on “sharply – and persistently – softer non-DC revenue.”

“Nevertheless, we believe AI-related revenue could be tracking to ~$1.4bn in FY25E, +75% above prior expectations for $800mn,” the analyst wrote.

Cantor Fitzgerald: “We were prepared for an earnings miss led by Marvell's more-cyclical businesses, but the magnitude clearly came as a surprise to us and likely many investors,” Muse said. He added that management guided to revenues of $1.15 billion for the April quarter, meaningfully below the consensus of $1.375 billion.

“We note these businesses peaked five quarters ago in October 2022 at $826M, highlighting a total peak-to-trough decline of a remarkable 65%,” the analyst further wrote.

KeyBanc: Marvell Technology reported in-line fourth-quarter results and announced disappointing first-quarter guidance, “as strong AI revs were unable to offset weaker revs from Carrier Infra, Enterprise Networking and Consumer,” Vinh stated. He added, however, that these segments could bottom in the current quarter.

“Regarding AI ASICs, MRVL disclosed it has begun shipping to both customers (we believe Google GOOG, AWS AMZN ) and anticipates ramping in the 2H and exiting FY25 at a $200M run rate,” the analyst said.

Goldman Sachs: “Marvell guided FY1Q (April) revenue down 19% qoq and 16% below Street consensus, as sustained strength in AI electro-optics and custom compute are expected to be more than offset by sharp sequential declines elsewhere,” Hari wrote in a note.

Although the Street estimates could be re-set, mainly to reflect persistent weakness across the Carrier Infrastructure and Enterprise Networking segments, they could be revised higher going forward “as the company’s merchant silicon business returns to sequential growth and the custom compute business begins its volume ramp,” he added.

Needham: Marvell Technology’s data center segment grew by 38% sequentially, which was higher than expected, and “is expected to remain strong through the forecast period,” Bolton said.

“We recommend investors buy on weakness, taking advantage of the weaker non-DC businesses to gain exposure to an accelerating AI-levered portfolio,” he added.

JPMorgan: “Marvell reported F4Q24 (Jan-Qtr) revenues slightly above consensus (EPS in-line) on better-than-expected datacenter (driven by strong growth in cloud 200G/400G and AI-based 800G optical) which more than offset weaker enterprise/ consumer/telco demand trends,” Sur said.

He added, however, that the company is witnessing continued soft demand and customer inventory correction in its cyclical businesses.

Oppenheimer: The results reflect an AI-led upside and the company excited the year with a more than $200 million run-rate in the business, Schafer said.

The contribution of AI in 2024 is now expected to be significantly higher than the prior target of $800 million, he added.

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