At first glance, predicting that a stock is poised to increase 50% is a bold move for any individual analyst. To a degree that's certainly true, but these days there are several market pundits who are very bullish on Marvell Technology (MRVL 0.13%) stock.
Among these optimists, Piper Sandler's Harsh Kumar is one of the more bullish, and he definitely considers the stock a buy right now. Let's see if he's justified in his view.
Marvell is a potential 49% gainer
More than a few pundits and investors were disappointed by Marvell's Q4 results, but not Kumar. Less than 24 hours after the company published its Q4 and full-year fiscal 2024 numbers, he raised his price target. He reset his $70 target upward to $100 per share. Kumar thinks the stock has a 49% upside over the next 12 months or so. It would follow too that Kumar maintained his overweight (read: buy) recommendation.
The quarter saw the chip maker's revenue and non-GAAP (adjusted) net income rise only marginally year over year. Both headline metrics met the consensus estimates of analysts like Kumar. More concerning to investors, though, was that the company missed badly on the two line items in its first-quarter guidance.
Marvell stock hasn't yet recovered from the subsequent investor sell-off. This provides an irresistible opportunity to buy the stock, according to Kumar. He feels that several of the company's segments are due for solid comebacks, or, in his words, "an accelerated return to growth."
NASDAQ: MRVL
Key Data Points
Marvell has several growth limiters
Markets tend to overbuy and oversell stocks when quarterly results either blow past expectations or come in far under them. Despite the weak numbers Marvell is still in a fine position to benefit from the growth of data centers (its top customer segment by far), while the white-hot field of artificial intelligence (AI) presents some exciting opportunities.
The company has several smaller product segments that are in sharp decline, though, and they'll probably remain a drag on its potential. So to me, this might not necessarily be a bargain stock around $67.
