The analyst firm lowered its fiscal 2016 EPS estimates for the chipmaker to 54 cents a share from its previous estimate of 90 cents a share. Credit Suisse also lowered its fiscal 2017 EPS estimates for Marvell to 68 cents a share from $1 a share.
The lower price target and EPS estimates are a result of Marvell's lower guidance, according to analysts John W. Pitzer and William Miller.
"MRVL reported F1Q Rev/EPS essentially in-line with neg pre guidance given on 04/24," the analysts wrote. "The company guided F2Q Rev/EPS BELOW Street and announced the retirement of CFO Mike Rashkin, and the appointment of interim CFO Sukhi Nagesh."
Separately, TheStreet Ratings team rates MARVELL TECHNOLOGY GROUP LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MARVELL TECHNOLOGY GROUP LTD (MRVL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
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 4.63, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $142.20 million or 41.50% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 14.84%.
- The gross profit margin for MARVELL TECHNOLOGY GROUP LTD is rather high; currently it is at 54.50%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.52% trails the industry average.
- MRVL, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 8.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: MRVL Ratings Report