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Should you buy Marvell Technology stock?

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Overlooked Alpha
Published on
June 22, 2023
Marvell Technology stock analysis. MRVL Stock.
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Marvell Technology is a fabless semiconductor company that creates products used in data centers, enterprise servers, the Internet of Things (IoT), smartphones, and storage systems.
The company went public in 2000 and until 2018, the return to shareholders – excluding dividends - was only 10%. That’s significantly worse than the S&P 500.

Since 2019, however, the stock has taken off gaining 300% and that’s because Marvel is directly benefiting from the boom in data centers and artificial intelligence. This can be seen in top line revenue which grew 50% in 2021 and another 33% last year.

At the current share price, Marvel has a market cap of 52 billion. It’s got 1 billion in cash and 3.2 billion of debt so the enterprise value is around 54 billion.

Revenue over the last 12 months is 5.8 billion with 1 billion in free cash flow. But net income is negative at minus 167 million.

That means Marvel stock is valued just over 9 times revenue and 54 times free cash flow.

Meanwhile, the company pays a dividend of 0.4% and has gross margins just over 48%

If we look at the company’s revenue mix, you can see that Marvel derives 38% of revenue from datacenters, 25% from enterprise networking, 19% from carriers, 11% from consumer products and 7% from automotive and industrial.

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