Marvell Technology’s recent dip in stock prices presents a promising opportunity for investors, according to experts at Loop Capital. Following the announcement of its latest earnings, which seemingly left investors underwhelmed, Marvell’s shares saw a significant 16% drop in premarket trading. The company reported earnings of 60 cents per share with revenues hitting $1.82 billion. These figures slightly surpassed the anticipated 59 cents per share and $1.80 billion in revenue projected by FactSet analysts. Moreover, Marvell’s guidance for the current quarter came in stronger than expected.
Despite the initial negative reaction, analyst Gary Mobley sees this as a strategic moment for investors. In a note released on Thursday, Mobley upgraded Marvell’s stock from a ‘hold’ to a ‘buy.’ Reflecting on the situation, he mentioned, “After surprisingly positive fourth-quarter results and encouraging first-quarter guidance, coupled with the nearly 40% drop in shares since January, we’re revising our rating on MRVL shares from Hold to Buy.”
Mobley observed that the aftermarket sell-off indicates investors were not convinced by the small gains reported. He noted, “The modest beat in earnings and guidance is mainly attributed to factors beyond AI and cloud sectors, though those areas clearly drive growth.” Mobley believes Marvell’s current valuation offers a good risk-to-reward ratio for investors contemplating entry.
It’s worth noting that Marvell’s stock has dipped over 18% since the start of the year. Despite this, Mobley maintains his price target at $110, suggesting more than a 20% potential upside from its last close at $90.14.
