The shares of Marvell Technology Group Ltd. (NASDAQ:MRVL) and HP Inc. (NYSE:HPQ) were among the active stocks of the last trading sessions. Marvell Technology Group Ltd. (NASDAQ:MRVL) declined to -1.34% closing at the price of $18.35 whereas the shares of HP Inc. (NYSE:HPQ) declined -1.3% with the decrease of -0.33 points closing at the price of $25.01. Marvell Technology Group Ltd. has currently decrease -14.57% in its stock over the period of 6-months while its rival HP Inc. added 14.99% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Marvell Technology Group Ltd. (NASDAQ:MRVL) is 10.1% while the ROI of HP Inc. (NYSE:HPQ) is 62.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MRVL’s EBITDA Margin is 22.42 whereas HPQ’s is 8.48.
Both the profitability ratios suggest a mixed sentiment for Marvell Technology Group Ltd. (NASDAQ:MRVL) and HP Inc. (NYSE:HPQ).
EPS & Surprise Factor
Marvell Technology Group Ltd. (NASDAQ:MRVL) reported $0.28/share EPS for the previous quarter where analysts were predicting an EPS to be $0.35/share Thus lagging the analyst Estimates with a Surprise Factor of -20 Percent. While, HP Inc. (NYSE:HPQ) reported EPS of $0.52/share in the last quarter. The analysts projected EPS of $0.51/share depicting a Surprise of 2 Percent.
Taking a look at Earnings per Share, HP Inc. tends to be beating the analyst estimates more than Marvell Technology Group Ltd.. so HPQ is more profitable than MRVL.
Technical Analysis of Marvell Technology Group Ltd. & HP Inc.
Moving average convergence divergence (MACD) shows that Marvell Technology Group Ltd. (NASDAQ:MRVL) is on a PRICE RELATIVITY trend While HP Inc. (NYSE:HPQ) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Marvell Technology Group Ltd. was in BULLISH territory and HP Inc. was in BEARISH territory.
MRVL’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While HPQ’s candle is BEARISH with HIGH.
EPS Growth Rate: MRVL’s 14.1% versus HPQ’s 10.1%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Marvell Technology Group Ltd. (NASDAQ:MRVL) is predicted at 14.1% while HP Inc. (NYSE:HPQ) stands at 10.1%. These numbers suggest that MRVL is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of MRVL stands at 2.5 while HPQ is at 0.9 whereas the debt ratio of the prior is 0.25 while the debt ratio of the later is 0.
The values of the both ratios suggest that MRVL is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.1 for MRVL and 2.1 for HPQ which means MRVL has Hold rating whereas HPQ has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for MRVL is $27.17 which is 32.46% of its current price while HPQ has price target of 28 which is 10.68% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
MRVL currently has price to earning P/E ratio of 27.93 whereas HPQ has 15.53 while the forward P/E ratio for the prior stands at 12.05 and for the later it depicts the value of 11.45.
The price to Book P/B for MRVL is 1.32, Price to Sale is at 5.01 and for HPQ these ratios stand at 0 and 0.72.