Shares of Marvell Technology (NAS: MRVL) hit a 52-week low on Tuesday. Let's look at how it got here and whether dark clouds are ahead.

How it got here
Shares plummeted in August after the company reported disappointing second-quarter earnings that fell short of analyst expectations. Revenue of $816 million was 9% less than it was a year ago, and non-GAAP net income was down 40%. The company cited broader weakness in macro conditions that were hurting its core storage and mobile markets.

Marvell is still hoping to tap into Chinese mobile growth with its baseband chips that support China's unique 3G standard TD-SCDMA, but also faces stiff competition from larger players like Qualcomm (NAS: QCOM) , whose newest chips also support the technology. The Thailand floods washed out much of the hard drive industry, including Marvell, and the sector has only recently recovered.


One of its biggest mobile processor customers, Research In Motion (NAS: RIMM) , is seeing demand dry up for BlackBerrys, which has also been hurting Marvell's results.

How it stacks up
Let's see how Marvell's recent performance compares to some of its semiconductor peers.

MRVL Chart

MRVL data by YCharts.

We'll also look at their fundamentals for deeper insight.

Company

P/E (TTM)

EPS Growth (TTM)

Net Margin (TTM)

Return on Equity (TTM)

Marvell

12.2

(37.5%)

14.0%

9.4%

Qualcomm

21.5

11.2%

27.8%

17.5%

Broadcom (NAS: BRCM)

26.0

(23.1%)

10.2%

11.9%

Texas Instruments (NAS: TXN)

21.0

(47.3%)

12.1%

14.4%

Source: Reuters. TTM = trailing 12 months.

Marvell looks to be the cheapest of this bunch, but it's not alone in seeing its bottom line shrink over the past year. Broadcom is the leader among Wi-Fi combo chips, putting competitive pressure on Marvell's products. TI recently exited the baseband business and is moving away from the wireless segment.

What's next?
Marvell has some opportunities in China, but its falling top line doesn't inspire confidence in its competitive strengths relative to its very capable rivals. Investors may have more pain in store.

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The article How Low Can Marvell Go? originally appeared on Fool.com.

Evan Niu, CFA, owns shares of Qualcomm. The Motley Fool owns shares of Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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