Story updated at 9:50 a.m. to reflect market activity.
Marvell fell -2.7% to $14.24 in morning trading.
The chipmaker is facing mounting headwinds according to the analyst firm.
"We acknowledge a continued upside bias to top-line estimates as several low-end China LTE baseband design wins ramp, but believe mgmt is sacrificing margins for revenue growth-a trade-off investors rarely reward," analyst Rick Schafer wrote. "Mobile&Wireless GM lags corporate average, and is unlikely to change any time soon as QCOM and MTK dominate the mid/high- end of the China mobile segment, relegating MRVL to the competitive low-end."
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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 robust 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 compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.9%. Since the same quarter one year prior, revenues rose by 30.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 3.37, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen 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 $0.64 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $0.64).
- 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 87.0% when compared to the same quarter one year prior, rising from $53.21 million to $99.48 million.
- You can view the full analysis from the report here: MRVL Ratings Report