Marvell Technology (MRVL) Stock Sinks As Market Gains: What You Should Know

Marvell Technology (MRVL) closed at $84.94 in the latest trading session, marking a -1.5% move from the prior day. This change lagged the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq added 0.14%.

Coming into today, shares of the chipmaker had gained 1.1% in the past month. In that same time, the Business Services sector lost 15.71%, while the S&P 500 gained 0.12%.

Investors will be hoping for strength from Marvell Technology as it approaches its next earnings release. The company is expected to report EPS of $0.48, up 65.52% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.32 billion, up 65.61% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.55 per share and revenue of $4.44 billion. These totals would mark changes of +68.48% and +49.61%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Marvell Technology. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Marvell Technology is currently a Zacks Rank #1 (Strong Buy).

Investors should also note Marvell Technology's current valuation metrics, including its Forward P/E ratio of 55.74. For comparison, its industry has an average Forward P/E of 22.83, which means Marvell Technology is trading at a premium to the group.

Meanwhile, MRVL's PEG ratio is currently 2.3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Technology Services industry currently had an average PEG ratio of 1.6 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 199, putting it in the bottom 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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