Marvell Technology Stock: Join the Rally at a 47% Discount

Marvell Technology (MRVL) stock might be a good buy now. Why? Because you get high margins – reflective of pricing power and cash generation capacity – for a discounted price. Companies like this generate consistent, predictable profits and cash flows, which reduce risk and allow capital to be reinvested. The market tends to reward that.

What Is Happening With MRVL

MRVL may be down -22% so far this year, but the silver lining is that it is now 47% cheaper based on its P/S (Price-to-Sales) ratio compared to 1 year ago.

The stock may not reflect it yet, but here is what’s going well for the company. Marvell’s strategic pivot to AI and data center solutions is yielding results, with custom AI silicon now in volume production for hyperscale customers. This high-value product focus, alongside strong demand for optical interconnects, drives healthy non-GAAP gross margins around 60%. The mid-2025 sale of the Automotive Ethernet business for $2.5 billion further concentrates the portfolio on these core, higher-margin opportunities, setting up robust operating cash flow, which reached $1.68 billion in fiscal 2025.

MRVL Has Strong Fundamentals

• Recent Profitability: Nearly 24.3% operating cash flow margin and 14.7% operating margin LTM.
• Long-Term Profitability: About 25.8% operating cash flow margin and -1.2% operating margin last 3-year average*.
• Revenue Growth: Marvell Technology saw growth of 45.0% LTM and 12.3% last 3-year average, but this is not a growth story
• Available At Discount: At P/S multiple of 9.4, MRVL stock is available at a 47% discount vs 1 year ago.

* Operating margin is negative because of significant non-cash line items such as stock-based compensation.
Below is a quick comparison of MRVL fundamentals with S&P medians.

*LTM: Last Twelve Months

Don’t Expect A Slam Dunk, Though

While MRVL stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. MRVL took a huge hit during the Dot-Com bubble, plunging about 91%. It wasn’t much better in the Global Financial Crisis, dropping roughly 77%. The inflation shock in 2022 knocked it down over 60%. Even the smaller downturns — 2018 correction and Covid pandemic — dragged it lower by around 40% each. The stock has solid fundamentals, but these numbers show it’s still vulnerable when the market turns sour. 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.

If you want more details, read Buy or Sell MRVL Stock.

How We Arrived At MRVL Stock

MRVL piqued our interest because it meets the following criteria:

1. Greater than $10 Bil in market cap
2. High CFO (cash flow from operations) margins or operating margins
3. Meaningfully declined in valuation over the past 1 year

But if MRVL doesn’t look good enough to you, here are other stocks that also check all these boxes:

1. Visa (V)
2. Salesforce (CRM)
3. Adobe (ADBE)

Notably, a portfolio that was built starting 12/31/2016 with stocks that fulfil the criteria above would have performed as follows:

• Average 12-month forward returns of nearly 19%
• 12-month win rate (percentage of picks returning positive) of about 72%

Smart Investing Begins With Portfolios

Stocks soar and sink – the key is staying invested. A balanced portfolio keeps you in the market, boosts gains and reduces single stock risk

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.