Please ensure Javascript is enabled for purposes of website accessibility

Why Marvell Technology Stock Jumped 22% Last Month

By Keith Noonan – Updated Jun 8, 2020 at 12:09PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The networking-semiconductor specialist's stock is now up roughly 32% year to date.

What happened

Shares of Marvell Technology (MRVL 3.71%) gained 22% in May, according to data from S&P Global Market Intelligence. The stock climbed in conjunction with market momentum and then saw a pronounced jump following the company's first-quarter results report at the end of the month.

^SPX Chart

^SPX data by YCharts.

On May 27, Marvell published first-quarter sales that topped the market's expectations, significantly boosting the share price. Sales for the period climbed roughly 5% year over year to reach $693.64 million, and earnings per share for the period came in at $0.18. The average analyst estimate had anticipated revenue of $678.7 million and EPS of $0.14.

Marvell's Prestera CX8500 chip.

Image source: Marvell.

So what

Despite some headwinds from the coronavirus, Marvell posted better-than-expected results in the first quarter thanks to strong performance from the company's data center and 5G infrastructure end markets and its networking business. Revenue for the period was down approximately 3% on a sequential basis, but sales were roughly flat versus Q4 after accounting for the company's divestiture from its Wi-Fi connectivity business.

Marvell's stock gains last month followed an 18.2% increase for its share price in April.  

Now what

The stock has continued to climb early in June's trading, with shares up roughly 7.6% in the month so far. 

^SPX Chart

^SPX data by YCharts.

Marvell is targeting sales of roughly $720 million in the second quarter, representing growth of roughly 9.6% year over year. Adjusted EPS is forecast between $0.17 and $0.23, good for 25% year-over-year growth at the midpoint of the target. Management expects tailwinds from companies upgrading to 5G technologies and said that it sees enterprises rapidly upgrading their network infrastructures and favorable outlooks in the data center cloud, enterprise, and automotive categories. 

Marvell stock trades at roughly 38 times earnings estimates and 7.8 times expected sales. 

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Marvell Technology Group Ltd. Stock Quote
Marvell Technology Group Ltd.
$44.50 (3.71%) $1.59

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.