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Needham Reiterates Buy Rating on Marvell (MRVL)

May 31, 2024 6:18 AM

Needham analyst N. Quinn Bolton reiterated a Buy rating and $95.00 price target on Marvell (NASDAQ: MRVL).

The analyst comments "Marvell reported a beat and raise 1QF25 as the Data Center segment continues to outperform. Our key takes: 1) GM will be weighed down through FY25 as the custom compute business ramps with margins well below the corporate average. We don't foresee GMs reaching the 64%+ target level through FY27; 2) We expect better fixed-cost absorption and a recovery in the traditional merchant businesses to drive GM higher in FY26; 3) We view the F2Q25 Data Center guide of +MSD% as conservative given growth rates seen by other AI players. The flat-to-higher Optics guide is especially conservative in light of known networking supply constraints. 4) FY25 AI revenue will surpass the previous $1.5BN expectation (we model $1.6BN). Our estimates are largely unchanged despite the GM downtick. Our $95 PT reflects a 30x P/E multiple of our CY26 NG EPS estimate."

For an analyst ratings summary and ratings history on Marvell click here. For more ratings news on Marvell click here.

Shares of Marvell closed at $76.85 yesterday.


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