In the short term at least, a good story can take you far on Wall Street, and with strong wins and execution in its cloud, wireless, and auto businesses, Marvell (MRVL) has a good story to tell, with the shares having risen almost 50% since my last update on the company, handily outperforming the semiconductor sector and virtually all of its peers (even giving Inphi (IPHI) a run for its money).
My issue with Marvell back in December was valuation, not execution, and not only did Marvell hit my numbers for FY 2019, the results since then have also been pretty much in line with my expectations. These shares now trade well ahead of the norms for the likely revenue and margin trajectory, and the company is going to need an extended run of high-teens growth (or higher) to sustain this kind of multiple. Beat-and-raises driven by strong underlying demand in cloud, wireless, and auto markets (and increasing market share) could do it, but expectations are already high.
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Great Execution In Attractive Markets Propelling Marvell To New Heights
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