Marvel Technologies (MRVL) Provided strong outlook for Q1 revenue and earnings after two acquisitions. This may have led to reporting a one-time decrease in Q4 cash flow. The bullish sentiment led to extraordinary out-of-the-money options trading volume.
MRVL is in it $91.05 Today, down from the last range, but after the market close on March 5 after the release of earnings, it rose sharply. That day, MRVL closed at $75.68, so it’s still up +20% over the past week.
MRVL Stock – Last 3 Months – Barchart – March 11, 2026
This may also be why there is so much action in its Out of the Money (OTM) market. This can be seen in the Barchart Extraordinary Stock Options Performance Report.
This shows that the $86.00 strike price is 33 times the normal volume of put options that were traded for expiration on March 27. Its strike price, 16 days to expiration (DTE), is 6% below today’s price.
As a result, it shows that some investors believe that MRVL will go down (i.e. buyers). But sellers of these OTM puts collect huge premiums.
MRVL Expires March 27 – Barchart Extraordinary Stock Options Performance Report – March 11, 2026
For example, the premium is $1.85 at the midpoint. This means that the seller collects two weeks’ worth of produce 2.15%:
$1.85/$86.00 = 0.0215
This means that an investor who saves $8,600 to “Sell to Open” 1 immediately collects $185.00 in their account. But if MRVL falls to $86.00 on or before March 16, the $8.6K warrant can be assigned to buy 100 shares at $86.00.
However, the breakeven cost (B/E) is only $84.15, or 7.6% below today’s price.
Similarly, sellers are hopeful that MRVL will fall below its B/E point. This may or may not happen in the next two weeks.
However, one thing is for sure: Investors have reason to be positive about Marvell Technologies’ outlook, given management’s guidance.
Marvell Technologies, a system-on-a-chip designer, is taking advantage of strong AI data center demand for its products. Revenues were up 22.08% YoY and +6.9% QoQ from $2.075 billion in the previous quarter to $2.219 billion.
Despite closing two acquisitions during the quarter, margins were up slightly. Stock analysis shows its Q4 gross margin was 50.48% compared to 51.74% a year ago and 51.57% in Q3.
This slight improvement in margins was seen in operating and EBITDA margins:
Operating margin: 18.23% Q4, vs. 12.94% 2024 Q4 and 17.25% Q3;
EBITDA margin: 32.51% Q4 vs. 30.87% and 32.48%.
However, its free cash flow (FCF), which includes capex expenses as well as net changes in working capital, was lower on an absolute basis. It reduced its FCF margin by:
FCF Margin: 11.69% Q4 vs. 24.44% Q4 2025, and 24.53% Q3.
This is likely to be a one-time sink due to the large demand on inventory and capex from acquisition closing costs and high AI data center demand.
For example, capex spending increased from $70 million last year to $114 million in Q4 2025, up 52%. This was also higher than the previous quarter (Q3) of $73.5 million. That means as a percentage of revenue, capex expense rose to 5.15% from 3.54% of sales in Q3.
Nonetheless, Marvell Technologies’ management was upbeat about its Q1 and full-year outlook.
For example, it said it expects non-GAAP diluted earnings per share (EPS) to be 79 cents (with a range of plus or minus 5 cents). This compares with its 80% diluted EPS for Q4.
However, assuming capex remains stable at this level, it is possible to project strong free cash flow (FCF) for the next 12 months (NTM).
For example, analysts predict that 2026 revenue will increase to $10.85 billion this year (a 32% increase from $8.195 in 2025) and $14.87 billion in 2027 (+81.5%). It means NTM average 12.86 billion dollars.
Over the trailing 12 months (LTM), Marvell’s free cash flow (FCF) was $1.396 billion, or 17% of revenue, according to Stock Analysis. But that includes a decline in Q4 FCF margins. So, if the company can average 20% (NTM) over the next 12 months, as it did in Q3 (20.29%) during the LTM period, FCF could exceed $2.5 billion:
This will be 84% higher than the FCF of $1.4 billion in 2025. As a result, MRVL stock may be overvalued in the coming year. Here’s why.
For example, given MRVL’s stock market cap today at $79.3 billion, MRVL’s stock FCF yield is about 1.8%:
$1.4b LTM FCF / $79.3 b mkt cap = 0.01765
So, using our $2.57 NTM FCF projection, here’s where the market cap could be over the next year:
$2.572b FCF / 0.0176 = 146 billion dollars mkt cap
In other words, the value of MRVL may increase by +84% in the next 12 months. It sets a price target (PT):
$91.05 x 1.84 = $167.53 PT
Other Wall Street analysts believe MRVL is deeply undervalued. For example, Yahoo! Finance shows that 43 analysts have an average PT of $120.28. This is +32% from today’s price.
Similarly, Barchart’s mean analyst PT is $119.35, and AnaChart.com’s survey of 31 analysts is $121.79. So, Wall Street is also seeing a significant rise in MRVL stock.
Despite the strong outlook and recent uptrend in MRVL stock, there is no guarantee that these options will be profitable for buyers or sellers. This is too short a period (16 DTE) to be anything but speculative.
However, short sellers of these puts have a good buy potential ($84.15). However, shorting these spaces comes with downside risk. If MRVL falls below this B/E point investors can end up with unrealized losses.
That’s why I always recommend taking it longer – usually a month to six weeks.
As of the date of publication, Mark R. Heck, CFA held no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
