Factors To Consider Ahead Of Marvell's (MRVL) Q4 Earnings

Marvell Technology Group Ltd. (NASDAQ:MRVL) is set to report fourth-quarter fiscal 2018 earnings results on Mar 8. The question lingering in investors’ minds is whether this semiconductor company will be able to post a positive earnings surprise or not in the quarter.

Notably, the company has a positive earnings surprise history. Over the trailing four quarters, its results surpassed the Zacks Consensus Estimate each time, with an average positive surprise of 10.1%. So, let’s see how things are shaping up prior to this announcement.

What to Expect?

The Zacks Consensus Estimate for the fiscal fourth quarter is pegged at 31 cents, reflecting a massive year-over-year increase of 40.9%. Further, analysts polled by Zacks anticipate revenues of $611.7 million, up roughly 7% from the year-ago quarter.

We believe strong demand for Marvell’s 4G LTE products and acquisition synergies will act as catalysts. The company’s current restructuring initiative will help it improve its cloud infrastructure and applications, which is anticipated to drive the top and bottom lines.

Factors to Consider

Marvell is a promising player in the solid state drive (SSD) controllers market. Over the coming years, the company expects an increasing number of PCs/servers to use the flash-based solid state technology for storage. The storage market is witnessing a steady increase in demand, given fast-growing data volume, especially the exponential growth in unstructured data. NAND (non-volatile storage technology) demand is expected to remain very strong in 2018 as well. SSD demand will also rise and might even surpass the manufacturing capacity, leading to periodic shortage and higher pricing in the near term.

Marvell has been benefiting from this growing demand for SSD products. Notably, the company’s storage revenues is increasing sequentially in the last two quarters, mainly driven by higher-than-anticipated demand at the SSD segments, along with elevated demand from enterprise. We believe Marvell’s fiscal fourth-quarter top and bottom-line results will benefit from this uptick in demand.

What the Zacks Model Unveils?

Our proven model does not conclusively show that Marvell is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Marvell carries a Zacks Rank #3, which increases the predictive power of ESP, but an ESP of -0.74% makes surprise prediction difficult.

Marvell Technology Group Ltd. Price and EPS Surprise

Marvell Technology Group Ltd. Price and EPS Surprise | Marvell Technology Group Ltd. Quote

Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these stocks have the right combination of elements to post an earnings beat:

Autodesk, Inc. (NASDAQ:ADSK) has an Earnings ESP of +8.70% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Avid Technology, Inc. (NASDAQ:AVID) has an Earnings ESP of +8.70% and a Zacks Rank #3.

Tech Data Corporation (NASDAQ:TECD) has an Earnings ESP of +0.28% and a Zacks Rank #3.

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