Marvell Plunges After Forecast Trails Loftiest Estimates
Wednesday, Mar 5, 2025 5:07 pm ET
3min read Marvell Technology (MRVL) shares took a nosedive on Friday, March 6, 2025, following the company's fourth-quarter and fiscal year 2025 earnings report. The stock plummeted 10.5% after the company's guidance fell short of the loftiest estimates. Here's a closer look at the situation and what investors can expect moving forward.
Marvell Technology reported revenue of $1.817 billion for the fourth quarter, up 27% year-over-year, and adjusted earnings per share (EPS) of $0.60, down 22.5% from the same period last year. While these results were largely in line with analyst expectations, the company's guidance for the first quarter of fiscal 2026 missed the mark. marvell expects revenue to be $1.875 billion, plus or minus 5%, with a non-GAAP gross margin of approximately 60%. Analysts had expected revenue of $1.96 billion and a non-GAAP gross margin of 60.1%.
The company's guidance for the first quarter of fiscal 2026 was not well-received by investors, as it indicated a slower growth rate than expected. Marvell's stock price has been on a rollercoaster ride in recent months, with the company's shares up around 27.6% on the year prior to today's decline. The stock is now trading at around 51 times next year's earnings estimates, which may have contributed to the sell-off.
Despite the recent decline, most analysts remain upbeat on Marvell, as the AI story remains intact. The company's custom ASIC business, which is a key driver of growth, is expected to continue to perform well. Additionally, management expects continued data center growth, along with a recovery in networking and carrier infrastructure segments in the second half of the year.
In conclusion, Marvell Technology's stock price took a hit after the company's guidance fell short of expectations. However, the company's AI story and the potential for a recovery in other segments remain attractive. Investors should keep an eye on Marvell's progress in the coming quarters, as the company's growth trajectory is expected to change with the significant weighting of the data center segment. As always, it's essential to do thorough research and consider the risks before making any investment decisions.
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