Marvel (MRVL) will report first quarter earnings tonight after the close. There is a conference call scheduled for 16:45 ET. 

Q1 Capital IQ consensus calls for EPS of $0.14 (-56% yr/yr) on revenue of $651 mln (+7.7% yr/yr). 

When the company reported in March, it provided Q1 guidance of $0.12-0.16 for EPS and $630.5-669.5 mln for revenues. 

The company is expected to guide for Q2 where EPS consensus stands at $0.19 (-28% yr/yr) on revenue of $681.4 mln (+3% yr/yr). 

Capital IQ consensus for FY20 EPS stands at $0.91 (+47% yr/yr) on revenue of $2.86 bln (roughly unchanged yr/yr). 

It is important to note that the above guidance was issued before the Department of Commerce order related to communications technology and Huawei. The Department of Commerce later issued limited exemptions for 90 days. Marvell mentioned Huawei as a customer in its 10K filing.

Looking back, the company beat on EPS two out of the last four quarters, but beat on revenues three out of the last four quarters. MRVL shares increased 3% following Q4 earnings.

MRVL has a $14 bln valuation and trades at 23x EPS vs peer XLNX which trades at 25x EPS vs the semi industry in the mid-to-high teens.


Based on the MRVL May31 $22 straddle, the options market is currently pricing in a move of ~6% in either direction by tomorrow. 

On a positive report, look for resistance near the $23.00-23.25 area, while support sits near the $20.75-21.25.

TRADE: Will buy breakout if they report better than expected guidance.