Marvell Jumps 16% on Quarterly Beat, Q4 Guidance Exceeds Expectations

Shares of Marvell Technology, Inc. (MRVL) rose 16.2% in the extended trading session on Thursday after the infrastructure semiconductor solutions provider reported strong third-quarter Fiscal 2022 results. Additionally, the company provided upbeat fourth-quarter guidance.

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Results in Detail

Notably, Marvell’s third-quarter results include the results of Innovium since the acquisition date (completed on October 5), while prior periods are not restated.

The company reported adjusted earnings of $0.43 per share, which comfortably beat the consensus estimate of $0.38 per share and grew 72% from the $0.25 per share reported in the same quarter last year.

Total net revenue of $1.21 billion grew 61% year-over-year and topped analysts’ expectations of $1.15 billion. Growth in all five end markets, with data center being the largest contributor, acted as tailwinds.

Adjusted gross margin for the third quarter stood at 65.1%, up 210 basis points on a year-over-year basis. (See Marvell stock charts on TipRanks)

Quarterly End Market Revenue

On an end market basis, Data Center revenues, which contributed 41% to total revenues, stood at $499.7 million, up 109% year-over-year. Additionally, Carrier Infrastructure contributed revenues of $215.1 million, up 28%, while revenues at Enterprise networking came in at $247.2 million, up 56%.

Furthermore, Consumer Market revenues of $182.5 million rose 20%, while Automotive/industrial revenues grew 114% to $66.6 million.

Outlook

Marvell CEO Matt Murphy said, “For the fourth quarter, we are expecting sequential revenue growth of 9 percent at the midpoint of guidance, led by 5G, which is projected to increase by 30 percent sequentially and data center which is forecasted to continue to grow in the double digits on a percentage basis.”

For the fourth quarter of Fiscal 2022, the company projects net revenue to be $1.32 billion (+/- 3%), versus the consensus estimate of $1.21 billion. Furthermore, adjusted earnings are expected between $0.45 and $0.51 per share against a loss of $0.42 per share estimated by analysts.

The company projects adjusted gross margin to be around 65%.

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Wall Street’s Take

Consensus among analysts is a Strong Buy based on 16 Buys versus 2 Holds. The average Marvell price target of $82.28 implies 15.84% upside potential. Shares have gained 55.7% over the past year.

Risk Analysis

According to the new TipRanks’ Risk Factors tool, Marvell stock is at risk mainly from three factors: Finance and Corporate, Production, and Legal & Regulatory, which contribute 42%, 19%, and 14%, respectively, to the total 43 risks identified for the stock.