Marvell Technology, Inc. (MRVL) Is a Trending Stock: Facts to Know Before Betting on It

Marvell Technology (MRVL) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Shares of this chipmaker have returned +28.4% over the past month versus the Zacks S&P 500 composite's +0.4% change. The Zacks Electronics - Semiconductors industry, to which Marvell belongs, has gained 32.8% over this period. Now the key question is: Where could the stock be headed in the near term?While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.Marvell is expected to post earnings of $0.59 per share for the current quarter, representing a year-over-year change of +28.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +26.8%.For the current fiscal year, the consensus earnings estimate of $1.56 points to a change of +3.3% from the prior year. Over the last 30 days, this estimate has changed +14.9%.For the next fiscal year, the consensus earnings estimate of $2.69 indicates a change of +72.7% from what Marvell is expected to report a year ago. Over the past month, the estimate has changed +7.5%.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Marvell.The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSRevenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.In the case of Marvell, the consensus sales estimate of $1.8 billion for the current quarter points to a year-over-year change of +26.4%. The $5.75 billion and $8.07 billion estimates for the current and next fiscal years indicate changes of +4.5% and +40.3%, respectively.Last Reported Results and Surprise HistoryMarvell reported revenues of $1.52 billion in the last reported quarter, representing a year-over-year change of +6.9%. EPS of $0.43 for the same period compares with $0.41 a year ago.Compared to the Zacks Consensus Estimate of $1.45 billion, the reported revenues represent a surprise of +4.29%. The EPS surprise was +7.5%.Over the last four quarters, Marvell surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Marvell is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Marvell. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marvell Technology, Inc. (MRVL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks