Marvell Technology Stock Has Skyrocketed, But Could MRVL Be Worth 24% More?

The sign for Marvell Technology out front of a corporate office by Valeriya Zankovych via Shutterstock

Marvell Technology (MRVL) stock is up over 76% in the last month (e.g., $176.27 on May 19). But could it be worth more? Using higher analyst revenue forecasts and higher FCF margin and FCF multiples, MRVL could be worth 24% more. This article will show how.

MRVL closed at $310.28 on Thursday, June 18, up 7.3%, and is up 51.5% in June, having closed at $205.00 on May 29. So, when will its meteoric rise end?  One way to look at this is to estimate its free cash flow (FCF) going forward.

MRVL stock - last 3 months - June 18, 2026

Forecasting Marvell Technology's Free Cash Flow (FCF)

I discussed its fair market value (FMV) and price targets (PT) in an April 22 article and, after its May 27 earnings release, a May 29 Barchart article, “Marvell Technology Reports Strong FCF and Outlook - Could MRVL Move Higher?”

I suggested that MRVL could be worth 24% more at $253.29 per share. But that was based on lower revenue forecasts. Since then, it makes sense to raise the estimate I used for Marvell Technology's FY 28 FCF margin.

For example, using analysts' FY 2028 revenue (ending Jan. 31, 2028) forecasts of $16.68 billion, as well as a 27% operating cash flow (OCF) margin, Marvel could generate over $4.5 billion in cash flow from operations (CFFO):

  $16.68b x 0.27 = $4.5036 billion CFFO

Moreover, let's assume that its capex rises over 25% in the next year from $391 billion, according to Stock Analysis, to $449 million:

  $4.50 billion - $0.449b capex = $4.051 billion FCF

That's over twice its $1.665 billion FCF in the last 12 months, according to Stock Analysis, and higher than my forecast of $3.3 billion in my last article.

That could lead to a significantly higher fair market value (FMV) estimate for Marvell Technology.

Price Targets for MRVL Stock

Let's assume that the market raises its valuation metric for MRVL with this higher FCF estimate. For example, using a 1.0% FCF yield:

  $4.051b / 0.01 = $405.1 billion fair market value (FMV)

That is almost 50% higher than its present market cap of $272 billion, as of June 18, according to Yahoo! Finance's calculations on June 21.

  $405.1b / $272b = 1.489 -1 = +48.9%

That implies MRVL's price target should be $462:

  1.489 x $310.28 = $462.00 price target

However, just to be conservative, let's estimate its FMV using a higher 1.5% FCF yield metric, to set a lower PT range:

  $4.051b / 0.015 = $270.06 billlion FMV

That is $2b lower than today's market cap. So, the range is between $270b and $405.1 billion, or $337.55 billion, or 24% higher:

  $337.55b avg FMV / $272b mkt cap today = 1.24 -1 = +24%

  $310.28 x 1.24 = $384.75 per share PT

That is significantly higher than my prior $253.29 PT, and 24% over last week's closing price of $310.28.

However, other analysts are nowhere near my PT. They are playing catch-up with the market. For example, Yahoo! Finance's average PT is $238.75, Barchart's is $244.16, and AnaChart's is $207.93.

Moreover, there is no guarantee MRVL will keep rising. It could have a pullback here. Therefore, one way to play MRVL is to sell short out-of-the-money (OTM) puts.

Shorting OTM MRVL Puts

This way, an investor can set a lower potential buy-in point, as well as earn income while waiting. Given that MRVL has high put option premiums, it makes sense.

For example, MRVL puts expiring on July 31 at the $287.50 strike price, i.e., over 7.4% below today's price (i.e., “out-of-the-money” or OTM), still have a high 10.3% put yield. Here's how that works out.

MRVL puts expiring July 31 - Barchart - June 18

The July 31 expiry $287.50 put option has a midpoint premium of $29.63, as of June 18. So, an investor who sells short this strike price makes an immediate yield of 10.3%:

  $29.63 / $287.50 = 0.103 = 10.3% for 44 days

However, this strike price still has a high delta ratio of 34%. That implies that over one-third of the time, MRVL will fall by more than 7.4% in the next 44 days, especially from MRVL's recent high stock price.

Nevertheless, even if that happens, the investor's net buy-in breakeven will be lower at $257.87 (i.e., $287.50 - $29.63), or 16.9% below last week's closing price. So, it does provide some downside protection and a lower potential buying point.

Keep in mind, though, that if the investor can repeat this play for three months straight, the expected return is over 30% (i.e., 10.3% x 3  = 30.9%). 

That would be the same as owning MRVL stock and holding it until it reaches a higher price of $404.29 per share. That's over my $384.75 PT shown above

The bottom line is that MRVL stock could have significant upside. One play is to sell short out-of-the-money (OTM) puts in nearby expiry periods.