Continue to hold Marvell (NASDAQ:MRVL) based on its current debt obligations?

The next earnings report is expected on the 2nd of March 2022. The stock continues to experience an active upward rally. While some millenniums are indifferent towards technology space, it makes sense to summarize Marvell Technology as a unique investment alternative. Let's summarize the possibilities of Marvell Technology maintaining its debt level in January.
Published over a year ago
View all stories for Marvell Technology | View All Stories
Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.

Reviewed by Gabriel Shpitalnik

Marvell Technology currently holds 4.89 B in liabilities with Debt to Equity (D/E) ratio of 0.33, which is about average as compared to similar companies. The entity has a current ratio of 1.72, which is within standard range for the sector.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Marvell Technology has an asset utilization ratio of 63.58 percent. This denotes that the company is making $0.64 for each dollar of assets. An increasing asset utilization means that Marvell Technology is more efficient with each dollar of assets it utilizes for everyday operations.
Marvell Technology financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Marvell Technology, including all of Marvell Technology's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Marvell Technology assets, the company is considered highly leveraged. Understanding the composition and structure of overall Marvell Technology debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Marvell Total Liabilities

Marvell Technology liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Marvell Technology has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Marvell Technology balance sheet include debt obligations and money owed to different Marvell Technology vendors, workers, and loan providers. Below is the chart of Marvell short long-term liabilities accounts currently reported on its balance sheet.
You can use Marvell Technology Group financial leverage analysis tool to get a better grip on understanding its financial position

How important is Marvell Technology's Liquidity

Marvell Technology financial leverage refers to using borrowed capital as a funding source to finance Marvell Technology Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Marvell Technology financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Marvell Technology's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Marvell Technology's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Marvell Technology's total debt and its cash.

Another angle On Marvell Technology

The new price hike of Marvell Technology may encourage stakeholders to take a closer look at the firm as it is trading at a share price of 83.59 on 50,825,127 in trading volume. The company management teams may have good odds in positioning the firm resources to exploit market volatility in January. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.98. The current volatility is consistent with the ongoing market swings in November 2021 as well as with Marvell Technology unsystematic, company-specific events.

Asset Breakdown

6.2 B
Assets Non Current
5.1 B
Goodwill
2.6 B
Current Assets
Total Assets8.76 Billion
Current Assets2.61 Billion
Assets Non Current6.15 Billion
Goodwill5.09 Billion
Tax Assets362.97 Million

Marvell Technology implied volatility may change after the hike

New total risk alpha is at 0.65. Marvell Technology has relatively low volatility with skewness of 3.24 and kurtosis of 18.38. However, we advise all investors to independently investigate Marvell Technology to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Marvell Technology's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Marvell Technology's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Marvell Technology Implied Volatility

Marvell Technology's implied volatility exposes the market's sentiment of Marvell Technology stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Marvell Technology's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Marvell Technology stock will not fluctuate a lot when Marvell Technology's options are near their expiration.

Our Takeaway on Marvell Technology Investment

While some other entities under the semiconductors industry are still a bit expensive, Marvell Technology may offer a potential longer-term growth to stakeholders. With a less-than optimistic outlook for your 90 days horizon, it may be a good time to exit some or all of your Marvell Technology holdings as it seems the potential growth was already fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Marvell Technology.

Building efficient market-beating portfolios requires time, education, and a lot of computing power!

The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.

Try AI Portfolio Architect

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Marvell Technology Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com