Zacks Investment Research Downgrades Marvell Technology Group (MRVL) to Hold

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Marvell Technology Group (NASDAQ:MRVL) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued on Monday.

According to Zacks, “Marvell is benefiting from strong growth in networking and storage business. Management is optimistic about three new storage architecture solutions that the company released. Moreover, several storage controller design wins are positives. Also, we believe that the strong demand for Marvell’s 4G LTE products could be a growth driver. Additionally, its buyout of Cavium is expected to broaden its offerings beyond hard disk drives microprocessors and help it enter into high growth areas such as data centers and wireless communications. Nonetheless, storage revenues are anticipated to remain weak due to headwinds like weakness in the PC market, CPU shortages, U.S.-China trade issues, moderating cloud CapEx and growing inventory at client companies. Moreover, it depends on some big customers for a substantial portion of its net revenues, exposing it to  customer concentration risk. Shares underperformed the industry in the past year.”

Several other equities research analysts have also recently issued reports on the company. Craig Hallum cut Marvell Technology Group from a “buy” rating to a “hold” rating in a report on Thursday. BidaskClub upgraded Marvell Technology Group from a “sell” rating to a “hold” rating in a report on Tuesday, January 29th. Needham & Company LLC reiterated a “buy” rating and issued a $25.00 target price on shares of Marvell Technology Group in a report on Monday, January 14th. Rosenblatt Securities reiterated a “buy” rating and issued a $26.00 target price on shares of Marvell Technology Group in a report on Thursday, January 10th. Finally, Goldman Sachs Group upgraded Marvell Technology Group to a “buy” rating in a report on Thursday, December 13th. One analyst has rated the stock with a sell rating, five have given a hold rating and fifteen have assigned a buy rating to the company. Marvell Technology Group has an average rating of “Buy” and an average price target of $24.86.

Shares of MRVL stock traded up $0.47 during mid-day trading on Monday, hitting $18.86. 348,286 shares of the company’s stock were exchanged, compared to its average volume of 12,002,641. Marvell Technology Group has a fifty-two week low of $14.34 and a fifty-two week high of $25.18. The company has a quick ratio of 1.74, a current ratio of 2.32 and a debt-to-equity ratio of 0.24. The stock has a market capitalization of $12.09 billion, a price-to-earnings ratio of 18.17, a price-to-earnings-growth ratio of 1.70 and a beta of 0.98.

Marvell Technology Group (NASDAQ:MRVL) last posted its quarterly earnings data on Tuesday, December 4th. The semiconductor company reported $0.33 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.32 by $0.01. Marvell Technology Group had a return on equity of 9.45% and a net margin of 4.76%. The business had revenue of $851.05 million for the quarter, compared to analysts’ expectations of $844.07 million. During the same quarter last year, the firm earned $0.34 earnings per share. The business’s revenue was up 38.1% on a year-over-year basis. As a group, analysts anticipate that Marvell Technology Group will post 0.89 earnings per share for the current fiscal year.

Marvell Technology Group announced that its Board of Directors has initiated a share buyback program on Tuesday, October 16th that allows the company to buyback $1.00 billion in outstanding shares. This buyback authorization allows the semiconductor company to purchase up to 7.9% of its shares through open market purchases. Shares buyback programs are usually an indication that the company’s board believes its shares are undervalued.

In other Marvell Technology Group news, Director Michael G. Strachan bought 10,000 shares of the company’s stock in a transaction dated Thursday, December 20th. The shares were acquired at an average cost of $14.85 per share, with a total value of $148,500.00. Following the completion of the transaction, the director now owns 32,338 shares in the company, valued at $480,219.30. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Syed Ali sold 442,000 shares of Marvell Technology Group stock in a transaction dated Friday, January 11th. The stock was sold at an average price of $17.14, for a total value of $7,575,880.00. Following the sale, the director now directly owns 4,950,515 shares in the company, valued at $84,851,827.10. The disclosure for this sale can be found here. 0.10% of the stock is currently owned by insiders.

Several hedge funds and other institutional investors have recently made changes to their positions in the company. FMR LLC increased its holdings in Marvell Technology Group by 5.1% in the second quarter. FMR LLC now owns 55,789,566 shares of the semiconductor company’s stock valued at $1,196,128,000 after buying an additional 2,685,377 shares during the last quarter. Bank of New York Mellon Corp increased its holdings in Marvell Technology Group by 19.1% in the second quarter. Bank of New York Mellon Corp now owns 6,604,982 shares of the semiconductor company’s stock valued at $141,610,000 after buying an additional 1,058,045 shares during the last quarter. State of Alaska Department of Revenue increased its holdings in Marvell Technology Group by 109.3% in the third quarter. State of Alaska Department of Revenue now owns 91,647 shares of the semiconductor company’s stock valued at $1,768,000 after buying an additional 47,867 shares during the last quarter. DNB Asset Management AS increased its holdings in Marvell Technology Group by 39.6% in the third quarter. DNB Asset Management AS now owns 57,785 shares of the semiconductor company’s stock valued at $1,115,000 after buying an additional 16,400 shares during the last quarter. Finally, World Asset Management Inc increased its holdings in Marvell Technology Group by 35.6% in the third quarter. World Asset Management Inc now owns 28,561 shares of the semiconductor company’s stock valued at $551,000 after buying an additional 7,499 shares during the last quarter. 95.29% of the stock is currently owned by institutional investors and hedge funds.

About Marvell Technology Group

Marvell Technology Group Ltd. engages in the business of providing semiconductors to high-performance application-specific standard products. It focuses on the development of complex System-on-a-Chip devices leveraging extensive technology portfolio of intellectual property in the areas of analog, mixed-signal, digital signal processing, and embedded and stand alone integrated circuits.

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