Can Marvell Technology Group (MRVL) Beat Earnings Estimates? - Analyst Blog

Marvell Technology Group Ltd. ( MRVL ) is set to report second-quarter fiscal 2015 results on Aug 21. Last quarter, the company posted a negative earnings surprise of 4.55%. Let us see how things are shaping up for this announcement.

Factors to Consider This Past Quarter

Marvell delivered mixed first-quarter results wherein the top line beat the Zacks Consensus Estimate, while the bottom line missed the same. Revenue contributions from end markets were higher than expected and increased both sequentially and on a year-over-year basis. Moreover, the company provided encouraging second-quarter guidance.

We believe that the strong demand for Marvell's 4GLTE products could drive growth in the forthcoming quarters. Additionally, the company's wide range of recently launched Internet of Things solutions is expected to boost growth. We also remain positive on Marvell's diverse revenue base and stable balance sheet.

Nonetheless, competition in the semiconductor market from major players such as Intel Corp. ( INTC ) and Texas Instruments remains a headwind.

Earnings Whispers?

Our proven model does not conclusively show that Marvell will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP : Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 22 cents. Hence, the difference is 0.00%.

Zacks Rank : Marvell's Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are a couple of other companies, which you may consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Abercrombie & Fitch Co. ( ANF ), with an Earnings ESP of +20.00% and a Zacks Rank #2 (Buy).

Dollar Tree, Inc. ( DLTR ), with an Earnings ESP of +7.69% and a Zacks Rank #3.

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INTEL CORP (INTC): Free Stock Analysis Report

ABERCROMBIE (ANF): Free Stock Analysis Report

MARVELL TECH GP (MRVL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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