Stock Analysis on Net
Stock Analysis on Net

Marvell Technology Inc. (NASDAQ:MRVL)

Present Value of Free Cash Flow to the Firm (FCFF)

Microsoft Excel

In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to the firm (FCFF) is generally described as cash flows after direct costs and before any payments to capital suppliers.

Intrinsic Stock Value (Valuation Summary)

Marvell Technology Inc., free cash flow to the firm (FCFF) forecast

US$ in thousands, except per share data

Microsoft Excel
Year Value FCFFt or Terminal value (TVt) Calculation Present value at 24.38%
01 FCFF0 1,574,965
1 FCFF1 1,542,503 = 1,574,965 × (1 + -2.06%) 1,240,168
2 FCFF2 1,609,616 = 1,542,503 × (1 + 4.35%) 1,040,474
3 FCFF3 1,782,858 = 1,609,616 × (1 + 10.76%) 926,574
4 FCFF4 2,089,063 = 1,782,858 × (1 + 17.17%) 872,910
5 FCFF5 2,581,810 = 2,089,063 × (1 + 23.59%) 867,354
5 Terminal value (TV5) 403,087,706 = 2,581,810 × (1 + 23.59%) ÷ (24.38% – 23.59%) 135,416,544
Intrinsic value of Marvell Technology Inc. capital 140,364,024
Less: Borrowings (fair value) 4,500,000
Intrinsic value of Marvell Technology Inc. common stock 135,864,024
 
Intrinsic value of Marvell Technology Inc. common stock (per share) $154.94
Current share price $275.28

Based on: 10-K (reporting date: 2026-01-31).

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Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

Weighted Average Cost of Capital (WACC)

Marvell Technology Inc., cost of capital

Microsoft Excel
Value1 Weight Required rate of return2 Calculation
Equity (fair value) 241,393,032 0.98 24.77%
Borrowings (fair value) 4,500,000 0.02 3.50% = 4.18% × (1 – 16.25%)

Based on: 10-K (reporting date: 2026-01-31).

1 US$ in thousands

   Equity (fair value) = No. shares of common stock outstanding × Current share price
= 876,900,000 × $275.28
= $241,393,032,000.00

   Borrowings (fair value). See details »

2 Required rate of return on equity is estimated by using CAPM. See details »

   Required rate of return on debt. See details »

   Required rate of return on debt is after tax.

   Estimated (average) effective income tax rate
= (12.40% + 1.08% + 21.00% + 21.00% + 12.92% + 13.93%) ÷ 6
= 16.25%

WACC = 24.38%

FCFF Growth Rate (g)

FCFF growth rate (g) implied by PRAT model

Marvell Technology Inc., PRAT model

Microsoft Excel
Average Jan 31, 2026 Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021
Selected Financial Data (US$ in thousands)
Interest expense 202,600 189,400 211,700 170,600 139,341 69,264
Net income (loss) 2,670,100 (885,000) (933,400) (163,500) (421,034) (277,298)
 
Effective income tax rate (EITR)1 12.40% 1.08% 21.00% 21.00% 12.92% 13.93%
 
Interest expense, after tax2 177,478 187,354 167,243 134,774 121,338 59,616
Add: Cash dividends declared and paid 205,100 207,500 206,800 204,400 191,049 160,574
Interest expense (after tax) and dividends 382,578 394,854 374,043 339,174 312,387 220,190
 
EBIT(1 – EITR)3 2,847,578 (697,646) (766,157) (28,726) (299,696) (217,682)
 
Short-term debt 499,800 129,500 107,300 584,400 63,166 199,641
Long-term debt 3,970,800 3,934,300 4,058,600 3,907,700 4,484,811 993,170
Stockholders’ equity 14,308,400 13,427,000 14,831,400 15,637,200 15,702,097 8,435,804
Total capital 18,779,000 17,490,800 18,997,300 20,129,300 20,250,074 9,628,615
Financial Ratios
Retention rate (RR)4 0.87 — — — — —
Return on invested capital (ROIC)5 15.16% -3.99% -4.03% -0.14% -1.48% -2.26%
Averages
RR 0.87
ROIC -2.38%
 
FCFF growth rate (g)6 -2.06%

Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30).

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2026 Calculations

2 Interest expense, after tax = Interest expense × (1 – EITR)
= 202,600 × (1 – 12.40%)
= 177,478

3 EBIT(1 – EITR) = Net income (loss) + Interest expense, after tax
= 2,670,100 + 177,478
= 2,847,578

4 RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [2,847,578 – 382,578] ÷ 2,847,578
= 0.87

5 ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × 2,847,578 ÷ 18,779,000
= 15.16%

6 g = RR × ROIC
= 0.87 × -2.38%
= -2.06%

FCFF growth rate (g) implied by single-stage model

g = 100 × (Total capital, fair value0 × WACC – FCFF0) ÷ (Total capital, fair value0 + FCFF0)
= 100 × (245,893,032 × 24.38% – 1,574,965) ÷ (245,893,032 + 1,574,965)
= 23.59%

where:

Total capital, fair value0 = current fair value of Marvell Technology Inc. debt and equity (US$ in thousands)
FCFF0 = the last year Marvell Technology Inc. free cash flow to the firm (US$ in thousands)
WACC = weighted average cost of Marvell Technology Inc. capital

FCFF growth rate (g) forecast

Marvell Technology Inc., H-model

Microsoft Excel
Year Value gt
1 g1 -2.06%
2 g2 4.35%
3 g3 10.76%
4 g4 17.17%
5 and thereafter g5 23.59%

where:
g1 is implied by PRAT model
g5 is implied by single-stage model
g2, g3 and g4 are calculated using linear interpolation between g1 and g5

Calculations

g2 = g1 + (g5 – g1) × (2 – 1) ÷ (5 – 1)
= -2.06% + (23.59% – -2.06%) × (2 – 1) ÷ (5 – 1)
= 4.35%

g3 = g1 + (g5 – g1) × (3 – 1) ÷ (5 – 1)
= -2.06% + (23.59% – -2.06%) × (3 – 1) ÷ (5 – 1)
= 10.76%

g4 = g1 + (g5 – g1) × (4 – 1) ÷ (5 – 1)
= -2.06% + (23.59% – -2.06%) × (4 – 1) ÷ (5 – 1)
= 17.17%