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On Thursday, Stifel analysts adjusted their outlook on Marvell Technology Group Ltd . (NASDAQ:MRVL), lowering the price target to $115 from the previous $130, while reiterating a Buy rating on the shares. According to InvestingPro data, Marvell commands a market capitalization of $78 billion and trades at a significant premium with an EV/EBITDA multiple of 81.9x. The revision follows Marvell’s latest financial results, which showed a modest beat in January quarter earnings, with revenue up by 1.0% and non-GAAP EPS increasing by $0.01 compared to Stifel’s estimates.
Marvell’s Data Center and Artificial Intelligence (DC/AI) revenue witnessed a 24% sequential increase, continuing the momentum from the previous quarter’s 25% growth. This strong performance, combined with the company’s overall revenue growth of 4.7% over the last twelve months to $5.77 billion, was attributed to the ramp-up of multiple custom silicon programs and strong progress in electro-optics. Looking ahead to the April quarter, the company anticipates further growth in AI/Cloud segments and a recovery in Enterprise Networking and Carrier Infrastructure, leading to a slight raise in forecasts by 2.1%.
The company’s custom ASIC business is gaining traction, with two high-volume production programs underway at leading hyperscalers, and follow-on products expected to contribute to financial year 2026 and beyond. Additionally, a third program with another hyperscaler is on track for a ramp-up in calendar year 2026. Despite the typical seasonality in On-Premise solutions, which is influenced by enterprise IT spending patterns, Cloud/AI is projected to achieve double-digit percentage growth quarter over quarter, building on a strong second half of calendar year 2024.
In their commentary, Stifel analysts highlighted Marvell’s leadership in AI and data center silicon, raising their estimates based on these strengths. The adjustment to the price target to $115 is solely based on lower comparable company valuations, with an enterprise value to sales (EV/S) multiple of 10.9 times the estimated earnings for calendar year 2026. InvestingPro analysis indicates that while Marvell operates with moderate debt levels, analysts expect the company to return to profitability this year. For deeper insights into Marvell’s valuation and growth prospects, including 10+ additional ProTips and comprehensive financial metrics, explore the full Pro Research Report available on InvestingPro.
In other recent news, Marvell Technology reported its Q4 FY2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.60 compared to the forecasted $0.59, and revenue of $1.82 billion against the expected $1.80 billion. Despite these positive results, the stock experienced a decline in after-hours trading. Analysts from various firms have adjusted their outlooks on Marvell, with Barclays (LON:BARC), Jefferies, Citi, and Wolfe Research all reducing their price targets while maintaining positive ratings on the stock. Barclays cut its target to $130, Jefferies to $100, Citi to $122, and Wolfe Research to $115, with each firm expressing varied levels of confidence in Marvell’s future prospects.
Jefferies and Citi analysts noted that Marvell’s recent earnings were slightly below the high market expectations, but they maintain confidence in the company’s future growth, particularly with its ongoing relationship with Amazon (NASDAQ:AMZN). Marvell has expressed confidence in its Amazon ASIC project, expecting revenue growth in fiscal years 2026 and 2027. Wolfe Research addressed market concerns about Marvell potentially losing a next-generation project to a competitor, but Marvell confirmed continued engagement with key customers for future projects.
Marvell’s management remains optimistic about growth prospects in the AI market, expecting significant revenue from custom XPUs to increase through fiscal years 2026 and 2027. The company also highlighted its multi-generational agreement with Amazon as a critical component of its strategy. Despite the recent stock price adjustments, Marvell’s strategic focus on AI and data center markets continues to be a key area of interest for investors.
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