The Conspicuous Consistency of Marvell Technology, Inc. (MRVL)
Hitting forecasts every quarter deserves a closer look
Whether adjusted EPS is 25 cents or 50 cents, Marvell Technology’s (MRVL) non-GAAP earnings either hit the Wall Street estimate on the nose or beat by only once cent. Looking back over the last five quarters, the company’s earnings beats were +1 cps, 0, 0, +1 cps, and +1 cps. When you see that type of pattern, you should look more closely for evidence of managing earnings.
Our review of MRVL’s recent quarters turns up several accounting-related benefits that appear to be running out of steam. This is especially concerning given the fact MRVL is only expected to post flat EPS for its third fiscal quarter and has already posted lower EPS y/y for both 1Q and 2Q. At 50x forward adjusted EPS, there is little room for error.
For a closer look, let’s get behind the numbers…
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