Marvell will be ‘in the same camp’ as AMD, Nvidia after ‘one of the best’ semiconductor earnings calls

Chief Financial Officer Jean Hu said on the earnings call late Thursday that she expects “continued strong demand across our end markets and improvement in supply to drive our top line revenue growth above 30% in fiscal 2023.” That projection generated enthusiasm, as did Marvell’s January-quarter revenue forecast that implied upwards of 60% growth.

The company’s earnings call could have been “one of the best (if not the best) semi conf[erence] calls I have listened to in quite some time,” wrote Mizuho desk-based analyst Jordan Klein in a note affiliated with Mizuho’s sales operations and not its research team. “In fact, it was a GAME-CHANGER for investors and in my view squarely positions MRVL as a best-in-class GROWTH SEMI into CY22,” he continued.

Marvell “will be in the same camp now” as Advanced Micro Devices Inc. AMD, -5.71% and Nvidia Corp. NVDA, -5.40%, he argued, amid the company’s cheery growth projections and likely expectations among the bull camp for $4 a share in annual earnings power within a few years. The company has a “clear line of sight given a backlog full of design wins that has basically locked in that growth rate” on the revenue line, he said in his note.

The current FactSet EPS consensus is $1.54 for the current fiscal year, and is $2.20 for next year.

Klein wasn’t alone in likening Marvell to a red-hot chip stock. “Marvell just pulled an ‘Nvidia’ on the Street last night, with an unambiguous beat and raise and taking FY23 sales growth to over 30%,” wrote Rosenblatt Securities analyst Hans Mosesmann.

Subscribe: Want intel on all the news moving markets? Sign up for our daily Need to Know newsletter.

Elsewhere, Marvell’s report sparked at least one upgrade from a research analyst.

“It’s hard to argue this was anything but a watershed quarter with a triad of better results, better guidance, and an expanding design pipeline that anchors a new F23 guide,” wrote Cowen & Co.’s Karl Ackerman, who lifted his rating on Marvell’s stock to outperform from market perform.

Ackerman cheered Marvell’s recent evolution, anchored by “portfolio-optimization” progress that has made the company increasingly competitive, in his view. “Indeed, Marvell has transformed itself from being a fast-follower to a market leader of providing semi-custom, integrated ICs on leading-edge silicon that address bandwidth friction existing in today’s networks,” he wrote, while increasing his price target to $100 from $60.

The report served as validation for those who had already taken bullish views on the stock and are now bringing their expectations higher. “Taking a step back, we have been highlighting MRVL as one of the best growth stories in semis, and to this end they are clearly not disappointing,” wrote Evercore ISI analyst C.J. Muse.

He now sees “a clear path to a $3.25+ earnings stretch goal in FY24,” whereas the consensus was for $2.43 a share, he said. “Looking out further, we believe that the $4.00 bogey we have been discussing by CY25 is now likely conservative – with earnings likely tracking closer to $4.25+ when all is said and done (at a minimum),” Muse continued, while boosting his price target to $105 from $72 and keeping an outperform rating.

Marvell shares have rocketed 75% so far this year, while Nvidia shares have soared 134%, AMD’s stock has rallied 56% and the S&P 500 SPX, -1.50% has risen 20%.