If highly specialized semiconductors appeal to your sensibilities, you'll want to tune in when Marvell Technology (Nasdaq: MRVL) reports fourth-quarter earnings tonight. Look upon the company's business prospects and be amazed! Or not.

What Fools say:
Here's how Marvell's Motley Fool CAPS rating stacks up against some of its peers and competitors:

Market Cap (millions)

Trailing P/E Ratio

CAPS Rating

Qualcomm (Nasdaq: QCOM)

$65,590

20.1

***

Texas Instruments (NYSE: TXN)

$38,650

15.9

****

Broadcom (Nasdaq: BRCM)

$10,140

51.2

***

Marvell

$6,940

N/A

****

Conexant Systems (Nasdaq: CNXT)

$246

N/A

*****

Data taken from CAPS on March 6, 2008.

Some CAPS players think Marvell is about to bounce off the bottom of its price slide, as the company's "management issues should be resolved now." The bears are few and far between; they point to high operating costs and a disappointing third quarter.

What management does:
Profit margins that once were nice and fat have sunk down in red ink, with cash flows not far behind. Likewise, the revenue growth ain't what it used to be.

Margins

7/06

10/06

1/07

4/07

7/07

10/07

Gross

53.9%

53.2%

52.4%

51.0%

50.3%

49.5%

Operating

14.7%

10.0%

5.1%

(0.1%)

(4.0%)

(4.1%)

Net

11.0%

6.8%

(0.5%)

(6.1%)

(10.0%)

(9.6%)

FCF/Revenue

15.1%

15.5%

7.0%

6.7%

(2.6%)

(5.1%)

Y-O-Y Growth

7/06

10/06

1/07

4/07

7/07

10/07

Revenue

42.3%

38.3%

34%

28.7%

21.1%

27%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
One newly appointed board member left the company after seven weeks on the job last fall. The CEO and the interim chief operating officer (the co-founders of Marvell, and also brothers), and a former COO still on the company payroll (the CEO's wife) had their salaries reduced to $1 a year in January, hoping to put an end to criticism of selfish management.

That would have been easier to swallow if they hadn't received a few hundred thousand stock options each only two weeks earlier. The potential size of that award, should the share price rise above the $14 grant price again, dwarfs their cash salaries anyhow.

With the downward financial trends and recent management turmoil, you have to wonder how Marvell can support a strong four-star CAPS rating these days. I'm a big fan of buying into temporary discounts, but I'm not so sure this downward spiral has stopped yet. Give me a quarter or two of improved margins -- stabilized would be a nice start, even -- and show me that the management team truly has shareholder interests in mind, and then we'll talk buy-ins.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is the Punxsutawney Phil of financial forecasting.