Analyst Urges Selling Marvell June 5 $162.5 Puts at $3.60 as Valuation Hits 45x Forward Earnings
Updated
Updated · CNBC · May 26
Analyst Urges Selling Marvell June 5 $162.5 Puts at $3.60 as Valuation Hits 45x Forward Earnings
4 articles · Updated · CNBC · May 26
Marvell investors were advised to sell the June 5 weekly $162.5 put for $3.60 ahead of Tuesday earnings, a trade that profits if the stock stays above the strike and sets a roughly $158.90 break-even.
The cautious bullish stance reflects a stock up more than 130% year to date and 220% over 52 weeks, with a 14-day RSI above 70 and shares hitting fresh highs.
Valuation is the main concern: Marvell now trades at about 45 times forward earnings — a 10-year high — leaving little room for an earnings miss despite strong AI and custom-chip demand.
Options are also expensive, with the market pricing an about 13.5% post-earnings move versus a decade-long average earnings swing of 8.5%, making outright buying less attractive than getting paid to wait.
The trade offers more than a 2.2% standstill yield in about 11 days and would leave the seller owning Marvell roughly 19% below current levels if assigned.
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