NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.8%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- MRVL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.46, which clearly demonstrates the ability to cover short-term cash needs.
- MARVELL TECHNOLOGY GROUP LTD's earnings per share declined by 6.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MARVELL TECHNOLOGY GROUP LTD increased its bottom line by earning $1.34 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($1.48 versus $1.34).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Semiconductors & Semiconductor Equipment industry. The net income has decreased by 12.5% when compared to the same quarter one year ago, dropping from $219.78 million to $192.39 million.
- Net operating cash flow has decreased to $263.41 million or 17.48% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
Marvell Technology Group Ltd. designs, develops, and markets analog, mixed-signal, digital signal processing, and embedded and standalone ARM-based microprocessor integrated circuits. The company has a P/E ratio of 10.2, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Marvell Technology Group has a market cap of $7.9 billion and is part of the
industry. Shares are down 35.5% year to date as of the close of trading on Friday.
You can view the full
or get investment ideas from our