Maravai LifeSciences Holdings, Inc. (MRVI) Admits to Incorrect Revenue Recognition, Ineffective Internal Controls; Class Action Pending

Core Viewpoint - Maravai LifeSciences has faced significant stock price declines due to concerns over its financial reporting and internal controls, leading to a class action lawsuit from investors [1][2][4]. Financial Reporting Issues - On March 18, 2025, Maravai warned investors against relying on its Q2 and Q3 2024 financial reports, stating they would be restated due to improper revenue recognition [3][6]. - The company acknowledged that its disclosure controls and procedures were ineffective, which contributed to the inaccuracies in financial reporting [3][6]. Stock Price Impact - Following the announcement on March 19, 2025, Maravai's shares fell nearly 6%, compounding a previous drop of 21% on February 25, 2025, when the company postponed its Q4 and FY 2024 earnings release [1][5]. - An analyst from Baird downgraded Maravai's rating from outperform to neutral and reduced the price target from $9 to$ 3 after the February announcement [5]. Class Action Lawsuit - A class action lawsuit has been filed against Maravai, representing investors who purchased securities between August 7, 2024, and February 24, 2025, alleging false and misleading statements regarding financial statements and internal controls [2][4]. - The lawsuit claims that Maravai failed to disclose crucial information about its financial reporting practices, which led to investor losses [4][5]. Revenue Recognition Concerns - Maravai is under scrutiny for potentially recording unearned revenues and overstating goodwill, with specific instances of revenue being inaccurately recognized by approximately $3.9 million in Q2 2024 [5][6]. - The company is currently assessing the adequacy of its internal controls over financial reporting, particularly concerning revenue recognition [6].