Why Marvel Technology Group's (MRVL) Stock Is Higher on Tuesday

NEW YORK (TheStreet) -- Shares of Marvell Technology Group (MRVL) are up 4.38% to 16.44 in early market trade after a district judge yesterday ordered the company to pay nearly $1.54B for breaching two hard disk drive patents held by Carnegie Mellon University.

While that amount is higher than the $1.17B that a jury awarded Carnegie in December 2012, the judge rejected Carnegie's requests for triple damages, removing a major overhang on the company.

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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 multiple strengths, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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

  • The revenue growth came in higher than the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 20.2%. Growth in the company's revenue appears to have helped boost the 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 3.78, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 133.33% and other important driving factors, this stock has surged by 45.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MRVL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MARVELL TECHNOLOGY GROUP LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MARVELL TECHNOLOGY GROUP LTD increased its bottom line by earning $0.65 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($1.06 versus $0.65).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 112.6% when compared to the same quarter one year prior, rising from $50.15 million to $106.63 million.
  • You can view the full analysis from the report here: MRVL Ratings Report

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