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NEW YORK (TheStreet) -- Marvell Technology (MRVL) - Get Free Report shares are up 0.8% to $13.24 in morning trading on Tuesday after the fabless semiconductor provider was upgraded to "overweight" from "equal weight" by analysts' at Morgan Stanley (MS) - Get Free Report today.

The firm also raised the company's price target to $17.50 from $15, representing a potential upside of 32% from the stock's current price.

"Our view is that the push around the new technology clarifies the management decision-making progress, and is the reason management has been expressing guarded optimism despite more flexible language on long term investment. Either FLC will drive incremental revenues, or wireless investment will come down," the firm said.

The upgrade comes after Friday's sell off of the company's stock as the company reported a 52% year over year decline in earnings to 13 cents per share on revenue that also fell 24% to $724 million.

The results were mixed when compared to analysts' consensus estimates of 10 cents per share on revenue of $733.8 million. 

For the current quarter the company forecast earnings between 10 and 12 cents per share on revenue between $710 million and $740 million. Analysts on average are expecting earnings of 12 cents per share on revenue of $743.7 million.

TheStreet Ratings team rates MARVELL TECHNOLOGY GROUP LTD as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MARVELL TECHNOLOGY GROUP LTD (MRVL) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 4.70, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for MARVELL TECHNOLOGY GROUP LTD is rather high; currently it is at 55.03%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MRVL's net profit margin of 1.94% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to $58.87 million or 74.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MARVELL TECHNOLOGY GROUP LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: MRVL Ratings Report