Marvell Technology Stock at 19% Discount, Worth Buying?
Marvell Technology (MRVL) stock deserves your consideration. Why? Because you get high cash flow margins for a discounted price. Here is some data.
- Revenue Growth: Marvell Technology saw growth of 37.1% LTM and 10.9% last 3 year average.
- Recent Profitability: Nearly 25.5% operating cash flow margin and 6.0% operating margin LTM.
- Long-Term Profitability: About 25.5% operating cash flow margin and -1.3% operating margin last 3 year average.
- Available At Discount: At P/S multiple of 10.5, MRVL stock is available at a 19% discount vs 1 year ago.
While revenue growth helps, this is not a growth perspective. Pricing power and high margins generate consistent, predictable profits and cash flows, which reduce risk and allow capital to be reinvested. Market tends to reward that.
As a quick background, Marvell Technology provides analog, mixed-signal, and digital integrated circuits, Ethernet solutions, and storage controllers for hard drives and solid-state drives supporting multiple host system interfaces.
| MRVL | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Semiconductors | – |
| PS Ratio | 10.5 | 3.3 |
| PE Ratio | -738.0 | 23.7 |
|
|
||
| LTM* Revenue Growth | 37.1% | 5.2% |
| 3Y Average Annual Revenue Growth | 10.9% | 5.3% |
|
|
||
| LTM* Operating Margin | 6.0% | 18.8% |
| 3Y Average Operating Margin | -1.3% | 17.9% |
| LTM* Op Cash Flow Margin | 25.5% | 20.4% |
| 3Y Average Op Cash Flow Margin | 25.5% | 19.8% |
|
|
||
| DE Ratio | 6.3% | 21.1% |
*LTM: Last Twelve Months
- The Smart Way to Own ANET: Collect 10% Before You Even Buy
- Triggers That Could Ignite the Next Rally In Meta Platforms Stock
- Can Coca-Cola Stock Withstand These Pressures?
- Fiserv Stock: Strong Cash Flow Poised for a Re-Rating?
- Comcast Stock Pullback: A Chance to Ride the Uptrend
- Has Accenture Stock Quietly Become a Value Opportunity?
But do these numbers tell the full story? Read Buy or Sell MRVL Stock to see if Marvell Technology still has an edge that holds up under the hood.
Markets swing. Quality endures. See how High Quality Portfolio stays balanced.
Stocks Like These Can Outperform. Here Is Data
Here is how we make the selection: We consider stocks > $10 Bil in market cap, and then filter out those with high CFO (cash flow from operations) margins or operating margins. We additionally consider only those stocks that have meaningfully declined in valuation over the past 1 year.
Below are statistics for stocks with this selection strategy applied since 12/31/2016.
- Average 12-month forward returns of nearly 19%
- 12-month win rate (percentage of picks returning positive) of about 72%
But Consider The Risk
Marvell may look solid, but it’s far from crash-proof. It plunged 92% during the Dot-Com bubble and nearly 77% in the Global Financial Crisis. The 2022 inflation shock hit it for around 62%. Even the smaller setbacks — 2018 correction and Covid pandemic — knocked it down close to 40%. Sure, it has strong fundamentals, but when the market turns, steep drops are part of the game.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read MRVL Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.