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Is a Beat Likely for Marvell (MRVL) This Earnings Season?

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Marvell Technology Group (MRVL - Free Report) is likely to beat expectations when it reports fourth-quarter fiscal 2022 results after market close on Mar 3. In the last reported quarter, the company delivered an earnings surprise of 13.2%.

Marvell surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.3%.

Marvell Technology, Inc. Price and EPS Surprise

Marvell Technology, Inc. Price and EPS Surprise

Marvell Technology, Inc. price-eps-surprise | Marvell Technology, Inc. Quote

Factors to Note Ahead of Q4 Earnings

Marvell’s fourth-quarter performance is likely to have benefited from solid demand for its networking products, primarily across data center and 5G infrastructure end markets.

During its third-quarter conference call, Marvell stated that it anticipates strong sequential revenues in the fourth quarter, driven by the substantial contribution from the cloud data center end market, accelerated 5G adoptions in the United States and other regions and broad growth across multiple products.

Marvell projects fiscal fourth-quarter revenues of $1.320 billion (+/- 3%). This suggests a year-over-year increase of 65% and sequential growth of 9%.

Additionally, 5G and cloud product ramp-ups and revenues from the recently acquired Inphi Corporation business might have favored MRVL’s overall performance during the quarter under review.

Record bookings and the ramp-up of multiple Ethernet design wins in upcoming vehicles are anticipated to have driven revenues significantly in the fiscal fourth quarter. The consumer and industrial businesses are likely to have put up an impressive show in the quarter under review.

However, certain ongoing supply-chain challenges are anticipated to have acted as headwinds, which might have curbed Marvell’s ability to fully meet the increase in demand for some of its product offerings.

Marvell expects the fourth-quarter non-GAAP gross margin of approximately 65%, while non-GAAP operating expenses are estimated between $390 million and $395 million. The company forecasts to report non-GAAP earnings per share of approximately 48 cents (+/- 3 cents), representing year-over-year and sequential growth of approximately 66% and 12%, respectively.

Earnings Whispers

Our proven model predicts an earnings beat for Marvell this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (49 cents per share) and the Zacks Consensus Estimate (48 cents per share), is +1.73%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Marvell carries a Zacks Rank #2.

Other Stocks With the Favorable Combination

Per our model, DICK'S Sporting Goods (DKS - Free Report) , American Eagle Outfitters (AEO - Free Report) and Abercrombie & Fitch (ANF - Free Report) also have the right combination of elements to post an earnings beat in their upcoming releases.

DICK'S Sporting Goods currently carries a Zacks Rank #2 and has an Earnings ESP of +4.86%. The company is slated to report its fourth-quarter fiscal 2022 results on Mar 8. DICK'S Sporting Goods’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 104.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DICK'S Sporting Goods’ fourth-quarter earnings stands at $3.39 per share, implying a year-over-year increase of 39.5%. DKS is estimated to report revenues of $3.31 billion, which suggests growth of 6% from the year-ago quarter.

American Eagle Outfitters carries a Zacks Rank #3 and has an Earnings ESP of +0.69%. The company is scheduled to report fourth-quarter fiscal 2022 results on Mar 2. American Eagle Outfitters’ earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 12.7%.

The Zacks Consensus Estimate for AEO’s fourth-quarter earnings is pegged at 36 cents per share, indicating a year-over-year decline of 7.7%. The consensus mark for revenues stands at $1.52 billion, suggesting a year-over-year increase of 17.6%.

Abercrombie & Fitch is slated to report fourth-quarter fiscal 2022 results on Mar 2. The company carries a Zacks Rank #3 and has an Earnings ESP of +2.35% at present. Abercrombie & Fitch’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 112.5%.

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at $1.28 per share, suggesting a year-over-year decline of 14.7% from the year-ago quarter’s earnings of $1.50. ANF’s quarterly revenues are estimated to increase 5.4% year over year to $1.18 billion.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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