Marvell Technology Group Ltd. (NASDAQ:MRVL) is set to report FQ4 2014 earnings after the market closes on Thursday, February 20th. Marvell provides semiconductor, storage, and communication products for a variety of markets including high volume storage, consumer, mobile and wireless, and digital entertainment. Wall Street is expecting the chip designer to report 16% growth in sales compared to FQ4 last year. RBC Capital analyst Doug Freedman recently noted that Marvell has beaten EPS forecasts in 9 of the past 10 quarters. Here's what investors expect from Marvell Technology on Thursday.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for MRVL to report 26c EPS and $901.47M revenue while the current Estimize.com consensus from 13 Buy Side and Independent contributing analysts is 27c EPS and $918.32M revenue. This quarter the buy-side, as represented by the Estimize.com community, is expecting MRVL to beat the Wall Street consensus on both EPS and revenue.
Over the previous 6 quarters the Estimize consensus has been more accurate than Wall Street in forecasting Marvell's EPS and revenue 4 times each. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors, Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing a larger differential compared to other quarters, especially on revenue.
The distribution of estimates published by analysts on the Estimize.com platform range from 23c to 36c EPS and $895.00M to $1.020B in revenues. This quarter we're seeing a larger distribution of estimates for Marvell.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution of estimates, signaling less agreement in the market, could mean more volatility post earnings.
Throughout the quarter, the Wall Street EPS consensus increased from 23c to 26c, while the Estimize consensus fell from 29c to 27c. Over the same period of time, Wall Street raised its revenue forecast from $846.86M to $901.47M while the Estimize consensus decreased from $947.49M to $918.32M. Timeliness is correlated with accuracy and we saw converging expectations between the two groups at the end of the quarter.
The analyst with the highest estimate confidence rating this quarter is Stockflare_COO who projects 28c EPS and $903.47M in revenue. In the Winter 2014 season Stockflare_COO is rated as the 7th best analyst and is ranked 28th overall among over 3,900 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case Stockflare_COO is expecting Marvell to beat the Estimize consensus on EPS but come up short on revenue.
The semiconductor industry has been hot lately and investors have set the bar high for Marvell Technologies this quarter. On Thursday the buy side, as represented by the Estimize.com community, is expecting MRVL to beat the Street's consensus on both the top and bottom line.
Disclosure: No positions.