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VMware, Inc.NYSE:VMW Stock Report

Market Cap US$61.5b
Share Price
n/a
US$158.83
n/aintrinsic discount
1Y19.4%
7D-4.8%
Portfolio Value
​
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VMware, Inc.

NYSE:VMW Stock Report

Market Cap: US$61.5b

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

VMware (VMW) Stock Overview

VMware, Inc. provides software solutions in the areas of modern applications, cloud management and infrastructure, networking, security, and workspaces in the United States and internationally. More details

VMW fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance1/6
Financial Health2/6
Dividends0/6

Rewards

Trading at 37.5% below our estimate of its fair value

Earnings are forecast to grow 14.16% per year

Risk Analysis

Significant insider selling over the past 3 months

Has a high level of debt


VMW Community Fair Values

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ZenaTech
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US$6.8569.3% undervalued intrinsic discount

ZenaTech: A big bet on the rise of AI drones and drones-as-a-service

Key Takeaways ZenaTech is focusing its efforts into building AI drones, combining Drone as a Service, SaaS, and AI as its key revenue drivers. Previously building software for agriculture, ZenaTech has shifted rapidly toward drone services, now driving ~70% of revenue after recent acquisitions.

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VMware, Inc. Competitors

Price History & Performance

Summary of share price highs, lows and changes for VMware
Historical stock prices
Current Share PriceUS$142.48
52 Week HighUS$181.14
52 Week LowUS$109.00
Beta0.83
1 Month Change-5.45%
3 Month Change-12.35%
1 Year Change19.38%
3 Year Change0.56%
5 Year Change-11.77%
Change since IPO179.37%

Recent News & Updates

Recent updates

Seeking Alpha • Oct 17

VMware: What China Might Ask Of Broadcom Is Concerning Markets

Summary VMware saw declines as concerns over the last leg of the Broadcom-VMware deal intensified over a snag in China. China's SAMR is asking for unclear behavioral remedies, which probably raises some concerns of economic nationalism and a possibly spiteful China. Traders are right to have some concern despite sources saying the deal should close without major issue, even though it more likely will than not. While a deal spread remains that offers almost 10% upside, VMW stock isn't something we think offers such asymmetric speculative opportunity. Read the full article on Seeking Alpha
Seeking Alpha • Jul 12

VMware: Subscription Revenue Status And Regulatory Update

Summary VMware is transitioning its revenue model from license to subscription, making most of its product offerings available as a service, which could lead to increased recurring revenues. The company's shift to a more network and security-focused role, along with its partnerships with equipment providers and software developers, has helped it maintain its market position despite competition from cloud-centric hyperscalers. Despite high valuations and potential economic uncertainty, VMware's product appeal and potential margin gains from the subscription model justify a "Hold" position, with its merger with Broadcom also on track to be approved. Read the full article on Seeking Alpha
Seeking Alpha • Feb 15

VMware: Still Solid, Acquisition Or Not

Summary VMware is in the process of being acquired by Broadcom, although this is still not guaranteed given increased regulatory scrutiny from Washington. The company appears to be at an inflection point, with more debt than it has had for some time as well as material volatility across both revenues and net income. Nonetheless, this is still a stalwart provider of core computing software that counts every major public company as a customer. As such, the acquisition may present as a mixed bag to Broadcom - but this company will likely still keep kicking no matter the outcome of that transaction. Overview VMware (VMW) is a tenured virtualization and cloud services company. Virtualization in this context refers to the creation and utilization of virtual machines, which are synthetic computing environments (computers) defined through software. Virtualization is a core element of modern computing, with one piece of hardware often running multiple virtual machines; this occurs in contexts as wide-ranging as data centers to your mobile phone. Virtualization technology opens the door to emulation, allowing various kinds of computers to leverage other operating systems and tools without code having to be rewritten. Without virtualization, software would have to be written in a bespoke fashion for every type of hardware. The most well-known example of a virtual machine would be the JVM (Java Virtual Machine), the environment that all Java code runs in – no matter what computer is running it. Founded in 1998 in Silicon Valley, VMware has a storied history of innovation in regards to virtualization technology. While less known than many of its big tech peers, it nonetheless forms a large portion of the backbone for modern computing and networking. As it has continued to mature, the company has also branched out into cloud services, bringing it into direct competition with known cloud players. Virtualization is still the core of its business. VMware conducted an initial public offering in Q2 2007. Notably, the stock has underperformed both the NASDAQ Composite (IXIC) as well as the SP500 since then. For most of the last decade VMware was majority-owned by Dell (DELL), which continues to be a significant customer; this ownership stake was unwound in late 2021. SeekingAlpha.com VMW 2.15.23 Furthermore, VMware is currently in the process of being acquired by Broadcom (AVGO). While this deal is facing scrutiny by regulators, the general consensus is that it should proceed as planned. This article will serve to review VMware’s financials and business performance such that Broadcom investors know what they’re getting in the context of the acquisition. In the case that the deal does not go through, owners and prospective investors in VMware should also be well-served by the review that is to follow. Financials VMware is undoubtedly a mature technology company. As such, we can investigate it from the perspective of standard fundamental analysis. Starting with revenues, we see that VMware has maintained solid, even healthy, growth throughout the last decade. Putting up double-digit growth even as it crossed the $10B a year mark, VMware has now seen a slowdown in revenue growth over the last two years. This is likely due to enterprise customers, such as AWS, making progress on building their own proprietary virtual machine technology. While this isn’t economic for most entities, the largest customers (with the largest data centers) are indeed incentivized to vertically integrate in this fashion – this kind of software isn’t cheap. It is also worth contextualizing these figures by reminding ourselves that 100% of the Fortune 500 make use of VMware services in their respective businesses. Since data processing demand has only continued to increase, I believe that it is fair to infer that the vertical integration of its largest customers is a driving factor in it seeing recent unsteadiness in its revenues. SeekingAlpha.com VMW 2.15.23 SeekingAlpha.com VMW 2.15.23 The profitability story here is a bit more volatile, with VMware facing significant headwinds over the last several years as to its bottom line. The overall volatility is also due to the company being in what is an R&D and capex-intensive business. Virtualization technology is sophisticated and requires expensive systems-level software developers to both develop and maintain. SeekingAlpha.com VMW 2.15.23 SeekingAlpha.com VMW 2.15.23 These numbers are evidently robust, albeit in the early stages of trending in the wrong direction. This is still very much a cash-generative entity, with a decade of positive free cash flow behind it. This likely won’t change too much even as the other variables shift somewhat. Worth noting here is the large structural increase in the company’s debt service; it is now paying roughly $200M yearly in debt service, with that figure also having increased another 40% in the current fiscal year.
Seeking Alpha • Dec 08

Broadcom to face in-depth European probe into VMware deal - report

Braodcom (NASDAQ:AVGO) is expected to see an in-depth European antitrust review of its planned $61 billion purchase of VMware (NYSE:VMW), according to a MLex report. The full investigation is expected to be announced on Dec. 20 with a deadline for the antitrust body to complete its review in mid May, MLex said. Broadcom (AVGO) isn't expected to make any remedy offer next week. The report comes after Broadcom (AVGO) filed a request for its Vmware (VMW) deal with the European Commission last month and the agency set a Dec. 20 deal. Dealreporter on Tuesday said that said Broadcom (AVGO) was attending a state of play meeting with the European Commission this week to discus the transaction. The Federal Trade Commission's review of VMW/AVGO is said focused on conglomerate effects of the combination, according to a separate Dealreporter item on Tuesday. The FTC is looking at conglomerate effects as there don't appear to any horizontal overlaps besides Endpoint Security and there are no vertical concerns. In May, Broadcom (AVGO) announced that it was acquiring VMware (VMW) for $61B in cash and stock.
Seeking Alpha • Nov 15

Broadcom said to file request for European antitrust approval for VMware - report

Broadcom (NASDAQ:AVGO) has filed a request for its planned $61 billion acquisition of VMware (NYSE:VMW) with the European antitrust regulator. The European Commission is expected to set Dec. 20 as a deadline for reviewing the combination, according to a MLex report. Reuters reported last month that Broadcom (AVGO) was said to seek early European Union approval for its planned VMWare acquisition. Broadcom planned to argue that VMware competes with Amazon (AMZN), Google (GOOGL) and Microsoft (MSFT) as it hopes to avoid a protracted review.  VMware (VMW) rose 1.9% in trading on Tuesday, while Broadcom (AVGO) gained 2.6%. In May, Broadcom (AVGO) announced that it was acquiring VMware (VMW) for $61B in cash and stock.
Seeking Alpha • Oct 11

VMware opens research and innovation center in Montreal

VMware (NYSE:VMW) has established a research and innovation center in Montreal, Canada focused on building 6G technologies. Located within Centech and ÉTS in Montreal, the VMware Next G-AI Research and Innovation Centre brings together VMware's (VMW) multi-cloud infrastructure, advanced networking, and modern application development expertise with the latest in emerging cloud native development techniques and AI/ML capabilities to deliver a sustainable path to 5G+ and 6G technologies. In partnership with Mitacs, the cloud services firm is working with researchers across Canada to develop sustainable 5G+ and 6G technologies. The lab provides researchers and industry partners with access to advanced software and hardware that allows them to quickly validate and demonstrate key concepts. In addition, the VMware Tanzu Modern Software Factory provides VMware customers and partners with access to VMware Tanzu solutions and open-source technologies.
Seeking Alpha • Sep 12

Favorable Odds On Broadcom's Acquisition Of VMware

Summary VMware has not been thriving as a standalone firm. Investors are betting on the acquisition by Broadcom. The Wall Street consensus outlook indicates confidence that the deal will go through. The market-implied outlook (calculated from options prices) suggests elevated probabilities that the acquisition will proceed. In May, Broadcom (AVGO) announced that it was buying VMware (VMW) for $61 Billion in cash and stock, one of the largest tech acquisitions ever. As a result, VMware is currently living in the odd wait-and-see state of a company that is in the process of being acquired. The single most significant factor that investors are betting on is whether the acquisition will be completed. VMW is also hard to value because the company has failed to demonstrate earnings growth in recent years. As a result, the stock price has been unusually range bound. Broadcom believes that there are growth synergies from the acquisition that can make WMW's substantial portfolio of products, services, and intellectual property pay off. As the announcement states "With the combined company's shared focus on technology innovation and significant research and development expenditures, Broadcom will deliver compelling benefits for customers and partners." After an initial pop following the acquisition announcement in May, with the shares closing as high as $131.99, they have fallen to the current price of $118.12. The major potential blocker for the acquisition is regulatory. The current focus is on EU antitrust concerns, although there are also potential issues in the U.S. Seeking Alpha 5-Year price history and basic statistics for VMW (Source: Seeking Alpha) Under the terms of the proposed acquisition, announced on May 22nd, VMW shareholders will elect to receive either $142.50 per share or 0.252 shares of Broadcom for each share of VMW. At AVGO's current share price of $522.40, the current market value of the share exchange would be $131.64. Broadcom has committed to closing the deal by the end FY 2023, which is the end of October of 2023, about 13 ½ months from now. VMW's current share price is 17% below the cash offer, reflecting the market's handicapping on the probability of the deal not going through. ETrade Historical (4 years) and estimated future quarterly EPS for VMW. Green (red) values are amounts by which EPS beat (missed) the consensus expected value (Source: ETrade) VMW reported FY Q2 results on August 25, 2022, beating expectations on earnings and revenue. While the company delivered significant growth in Software-as-a-Service (SaaS) and subscription revenue, key areas for cloud computing companies, the Q2 EPS is very close to results for the same quarter in 2019 and slightly below the values for 2020 and 2021. Similarly in other quarters of the year, there is no earnings growth. This goes a long way towards explaining why the current share price is 29% below the all-time high closing price of $167.04 on May 16, 2019. To formulate an outlook on VMW, I am relying on two forms of consensus outlooks. The first is the well-known Wall Street analyst consensus. The second is a probabilistic outlook that is implied by options prices, showing the effective consensus view from the options market. This is called the market-implied outlook. The price of an option on a stock reflects the market's consensus estimate of the probability that the stock price will rise above (call option) or fall below (put option) a specific level (the option strike price) between now and when the option expires. By analyzing the prices of call and put options at a range of strike prices, all with the same expiration date, it is possible to calculate a probabilistic price forecast that reconciles the options prices. This is the market-implied outlook. For a deeper explanation and background, I recommend this monograph published by the CFA Institute. Readers may also be interested in my recent posts on AVGO (here and here), in which I use the same approach. Wall Street Consensus Outlook for VMW ETrade calculates the Wall Street consensus outlook for VMW by combining the views of 5 ranked analysts who have published ratings and price targets within the past 3 months. The consensus rating has recently changed from a hold to a buy. The consensus 12-month price target is $138.33, 17.5% above the current share price. This price target is a mere 3% below the proposed acquisition price. The range of price targets is very small, ranging from a low of $136 to a high of $142.50. This situation highlights one of the limitations of point forecasts (forecasts that specify a single value). The analysts are undoubtedly aware that there is a meaningful probability that the acquisition will not close, but given the option to predict just one outcome, betting on the deal being completed makes sense. ETrade Wall Street analyst consensus rating and 12-month price target for VMW (Source: ETrade) Seeking Alpha's version of the Wall Street consensus outlook is calculated using ratings and price targets published by 21 analysts over the past 90 days. The results are very similar, although the consensus rating on VWM has been a buy for all of the past year. The consensus price target is $138.16, 17% above the current share price, and there is little spread in the individual price targets, although the lowest is $120, just above where the shares currently trade. Seeking Alpha Wall Street analyst consensus rating and 12-month price target for VMW (Source: Seeking Alpha) The level of confidence in this acquisition closing, as reflected in the consistency among analyst price targets, can be appreciated by looking at two other companies that are also in this process. One is Elon Musk's contested acquisition of Twitter (TWTR), which I wrote about in mid-July. Mr. Musk is trying to back out of the deal so, unsurprisingly, there is far less certainty and the spread in the price targets is much higher. Microsoft's pending acquisition of Activision (ATVI) looks far more likely, and the spread in analyst price targets back in May (when I last analyzed ATVI) was very low, similar to the range currently seen for VMW. Back then ATVI was trading at $78.20 and the highest and lowest 12-month price targets from ETrade were $95 and $100, so the spread was 6.4% of the share price at that time ($5 / $78.20). For VMW, this spread is 4.7% of the current share price ($6.50 / $138.33). Market-Implied Outlook for VMW I have calculated the market-implied outlook for VMW for the next 4.3 months, using the prices of call and put options that expire on January 20, 2023. I would have preferred to also look at options expiring further into the future, but the open interest and trading levels of the longer-dated options is too low to make market-implied outlook meaningful. The standard presentation of the market-implied outlook is a probability distribution of price return, with probability on the vertical axis and return on the horizontal. Geoff Considine Market-implied price return probabilities for VMW for the 4.3-month period from now until January 20, 2023 (Source: Author's calculations using options quotes from ETrade) The market-implied outlook for the next 4.3 months is bi-modal, indicating that there are high probabilities of either a significant gain or a significant loss and that the probability of ending up in the middle of these is lower. This form of the market-implied outlook is consistent with other cases of pending acquisitions that I have analyzed (see this analysis for Twitter and this one for Activision-Blizzard). I have never gotten this kind of bi-modal market-implied outlook other than for stocks of companies being acquired. I interpret this outlook as indicating that the positive mode (with a peak in probability corresponding to an 11% gain over the next 4.3 months) represents the deal continuing to work its way forward, and the negative mode (with peak probability corresponding to -11% return) represents a drop in share price if the deal is blocked. Based on this outlook, there is a higher probability of the acquisition continuing to move forward (the probability is higher for the positive mode). The options prices show that there is substantial risk of the deal falling apart, however. The expected volatility calculated from this outlook is 37.4% (annualized).
Seeking Alpha • Sep 01

VMware's vSphere 8 Brings DPUs From AMD, Intel, And Nvidia To Life

Summary Data Processing Units (DPUs) are starting to make an impact in corporate and cloud datacenters because of their ability to offload certain infrastructure tasks from a server’s main CPU. With the launch of VMware's vSphere 8 with support for Project Monterey, officially known as the vSphere Distributed Services Engine, the awareness and impact of DPUs is bound to get much larger. Aside from the vSphere news, VMware also made several announcements around its end-user computer offerings at VMware Explore. Those who follow the semiconductor market likely know that chipmakers AMD, Intel (INTC), and Nvidia (NVDA) all compete in various markets, most notably GPUs or graphics processing units. What few may realize, however, is that all three of these companies are also now competing in a market for a relatively new class of chip called a DPU, or Data Processing Unit. Sometimes also referred to as a Smart NIC (Network Interface Card), DPUs are starting to make an impact in corporate and cloud datacenters because of their ability to offload certain infrastructure tasks from a server’s main CPU. Thanks to the official launch of VMware’s (VMW) vSphere 8 with support for Project Monterey, officially known as the vSphere Distributed Services Engine, the awareness and impact of DPUs is bound to get much larger. The reason? With vSphere 8, the latest version of VMware’s cloud computing virtualization platform, the company is officially bringing support for new server architectures using DPUs from AMD and Nvidia. In addition, new server systems incorporating those DPUs are being introduced by Dell (DELL) and Hewlett Packard Enterprise (HPE). Support for Intel-based DPUs and server systems from Lenovo (LNVGY) will follow in subsequent releases. Intel has been developing its DPU technology for several years, but both AMD and Nvidia acquired other chip companies to bring DPUs into their portfolios. Nvidia purchased Mellanox Technologies in 2020, and AMD purchased Pensando Systems earlier this year. Early on, in talking about the purchase of Mellanox’s Bluefield DPU technology, Nvidia emphasized the growing importance of what they called “east-west” traffic in a datacenter. This basically referred to the network traffic that went from one server rack to another nearby rack as the result of the growing use of cloud-native, containerized applications that used these types of connections. Thanks to vSphere 8’s support for Distributed Services Engine, we’re seeing an even more compelling application of DPUs from all the vendors. These new applications leverage the onboard compute and storage capabilities that DPU server expansion boards also include. Specifically, DPUs are SOCs (system on chip) that include an Arm-based CPU core and a dedicated accelerator that’s designed to handle the infrastructure requirements (such as connecting to storage, performing networking, security tasks, etc.) that modern container-based applications require. vSphere Distributed Engine offloads these infrastructure services from the server CPU to the DPU, freeing the CPU up to work on the actual application workload. The result is better consolidation of workloads, more efficient performance on these core workloads, as well as separation of application workloads from those solely focused on infrastructure tasks, such as distributed firewalls, network traffic routing, and other storage and network-focused efforts. vSphere Distributed Services Engine manages the lifecycle of the DPU, including updating the software that runs in the DPU. Down the road, a potential added benefit of this arrangement is that DPUs would also be able to connect with bare metal servers that run their own dedicated OS and application workload, thus allowing them to connect to the larger VMware hybrid cloud infrastructure. The end result would be that any combination of virtualized, containerized, or bare metal workloads would all be capable of being managed from a single location via VMware’s Tanzu portfolio of modern application development and management tools. Aside from the vSphere news, VMware also made several announcements around its end-user computer offerings at VMware Explore. In particular, the company focused on enabling more effective hybrid work scenarios, via the concept of Workspaces, that integrate easy access to all corporate applications and key data across a range of different devices. At this year’s event, the company put a strong focus on automation of the Workspaces and on leveraging technologies like AI to help predict and prevent potential problems. The company also continued to refine its Horizon desktop-as-a-service cloud client computing solution with new enhancements in root cause analysis tools for Help Desk personnel. VMware previewed an automation tool for mobile devices, called Freestyle Orchestrator, that is designed to ease the process of provisioning mobile devices for use in corporate environments.
Seeking Alpha • Aug 25

VMware Q2 2023 Earnings Preview

VMware (NYSE:VMW) is scheduled to announce Q2 earnings results on Thursday, August 25th, after market close. The consensus EPS Estimate is $1.58 (-9.7% Y/Y) and the consensus Revenue Estimate is $3.3B (+5.1% Y/Y). Over the last 2 years, VMW has beaten EPS estimates 88% of the time and has beaten revenue estimates 88% of the time. Over the last 3 months, EPS estimates have seen 1 upward revision and 15 downward. Revenue estimates have seen 0 upward revisions and 12 downward. Contributor writes: 'VMware: Watch Regulatory Hurdles' Quant rating of Hold for the stock with 3.01 score and highest factor grades given to profitability.
Seeking Alpha • Aug 17

Profit From The Broadcom Takeover Of VMware

The acquisition represents about a 15% premium with a high probability of closing. Broadcom has a proven track record or growth through acquisition and the ability to close deals. The deal has been approved unanimously by the boards of both Broadcom and VMware. Deal Details In May of this year, Broadcom (AVGO) and VMware (VMW) announced an agreement in which Broadcom would acquire VMware for about $61 billion in cash and stock. The deal is expected to close during Broadcom’s fiscal year 2023, which begins in November of this year. The deal is structured to allow VMware shareholders the choice between receiving $142.50 in cash or 0.2520 shares of Broadcom common stock for each VMware share. These elections will be subject to proration, meaning 50% will be completed in cash and 50% in Broadcom stock. The average consideration for the acquisition will be approximately $138-$140/ share, compared to about $122/share for VMware currently, representing a premium of 13-16%. Of course, aggressive traders could choose to buy call options or use leverage to greatly enhance this return. Although it is important to note that trading activity to 2023 call options for VMware is limited, making liquidity and pricing a concern. The deal has been approved unanimously by the board of directors of both companies and is awaiting full regulatory approval. As part of the deal, Broadcom will assume $8 billion of VMware net debt and secure $32 billion in new financing, which is already committed. The premium that can earned by buying shares of VMware now is attractive given the high probability that the deal will close. While VMware traded into the low $130s following the announcement, it slid below $110 with the broader sell-off in tech that may have bottomed in July and is now in the low $120s. Given the weakness in stocks this year, and technology in particular, the spread on this deal remains wider than one would expect. Broadcom has a long history of growth through acquisition and has already mapped out its transition plan in detail for all stakeholders of both businesses. Acquisitions made by Broadcom in recent year include Brocade Communications Systems in 2017, CA Technologies in 2018, and Symantec Enterprise Security in 2019. 1-year performance of AVGO and VMW (Seeking Alpha) Complementary Businesses VMware, founded in 1998, provides multi-cloud services for apps, and is best known for its virtualization technology. The company now focuses on cloud management and infrastructure, networking, security, and digital workspaces. By acquiring VMware, Broadcom will increase revenue earned from software sales to approximately 49% of all revenue. Furthermore, Broadcom expects to add about $8.5 billion to its EBITDA within three years of closing the transaction, about a 50% increase from where it is today. Broadcom develops, designs, and supplies what it calls semiconductor solutions and infrastructure software. The company services data centers, networking, enterprise software, broadband, wireless, storage, and industrial markets globally. Broadcom is a Strong and Capable Buyer Broadcom is in exceptional financial condition with over $9 billion in cash, rapidly growing revenue and net income, and is trading at about 14x forward earnings. The company also pays a healthy dividend with a current yield just under 3% and has renewed its commitment to paying out 50% of the previous year’s free cash flow to shareholders. Broadcom’s dividend per share has grown at a compound annual growth rate of 43% since 2016. Company management has committed to paying down debt following the VMware acquisition to return the total debt/EBITDA ratio to below 2.5x within two years. Deleveraging Following Acquisitions (Broadcom)
Seeking Alpha • Jul 05

VMWare said not to get rival offer in go-shop period for Broadcom deal

VMware reportedly (NYSE:VMW) didn't receive a rival bid in its go-shop period for its planned $61 billion sale to Broadcom (NASDAQ:AVGO). VMware, which had 40 days to solicit other interest, may disclose details on its efforts, though plans haven't been finalized, according to traders, who cited a Bloomberg report.  VMware has until 11:59 p.m. Pacific time on Tuesday to solicit other bids. Broadcom's (AVGO) acquisition included a 40-day go shop fee, where VMware (VMW) can solicit alternative proposals, with the provision likely added because the deal was completed in just a few weeks. The go-shop expiration is just one hurdle that the semiconductor deal has overcome, though the acquisition may see more lengthy regulatory reviews, especially from other industry players who see VMware as the "Switzerland" of the data center segment. In late May, KeyBanc analyst Thomas Blakey noted that Broadcom's  (AVGO) bid for VMware (VMW), which has a go-shop period until July 5, is likely to be best and final.
Seeking Alpha • May 25

VMware Q1 Earnings Preview: Are They Executing The Multi-Cloud Strategy As Planned?

Tomorrow, VMware releases the 1Q23 earnings report. We’ll recap on what the market is expecting from VMware, and discuss the business strategy and market opportunity. The durable growth opportunity is in multicloud, so investors’ eyes should be on the subscription and SaaS figures. The Broadcom bid is super validating for both VMware’s excellence and the multicloud opportunity ahead. Since the expected deal leaked, VMW stock has jumped 20%+, but is still trading well below the speculated bid price of $140/share.
Seeking Alpha • Apr 05

VMware: Don't Let Short-Term Movements Distract You

The past one year has been disappointing for VMware shareholders, even after taking the special cash dividend into account. The company, however, is now priced very conservatively given its relatively high top-line growth and industry leading margins. VMware also has significant competitive advantages and is uniquely positioned to benefit a multi-cloud environment.
Seeking Alpha • Mar 12

VMware Struggles Today To Bloom Tomorrow

VMware relishes on a strong partnership with DELL and its strong product portfolio. It maintains a sustainable free cash flow and enjoys a growing CAPEX spending next fiscal year. The company faces numerous controlled risks from growing fixed interest payments and customer concentration risk. The management forecasts a struggling 2023, but is an important phase toward successful transformation that will lead to future profitability. VMware is trading at a discount to its 5 year average of 5.80x on a trailing EV/Sales ratio of 4.52x and is currently trading near potential support.

Shareholder Returns

VMWUS SoftwareUS Market
7D-4.8%3.7%3.2%
1Y19.4%-7.9%31.0%

Return vs Industry: VMW underperformed the US Software industry which returned 37% over the past year.

Return vs Market: VMW underperformed the US Market which returned 28.2% over the past year.

Price Volatility

Is VMW's price volatile compared to industry and market?
VMW volatility
VMW Average Weekly Movement4.8%
Software Industry Average Movement9.7%
Market Average Movement7.1%
10% most volatile stocks in US Market16.1%
10% least volatile stocks in US Market3.2%

Stable Share Price: VMW's share price has been volatile over the past 3 months.

Volatility Over Time: VMW's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
199838,300Raghu Raghuramwww.vmware.com

VMware, Inc. provides software solutions in the areas of modern applications, cloud management and infrastructure, networking, security, and workspaces in the United States and internationally. It offers VMware multi-cloud solutions, including VMware vSphere, a data center infrastructure that provides the fundamental compute layer; and vSAN and VxRail, which offers holistic data storage and protection options to applications running on vSphere; as well as VMware Cloud Foundation, a cloud platform that combines its vSphere, vSAN, and NSX with VMware Aria Cloud Management into an integrated stack that delivers ready cloud infrastructure for private and public clouds. The company also provides networking solutions, such as VMware NSX, NSX Distributed and Gateway Firewalls, NSX Network Detection and Response Engine, NSX Advanced Load Balancer, Tanzu Service Mesh, HCX, and VMware SASE; security solutions consisting of VMware Carbon Black Endpoint, Workload, and Container; and anywhere workspace solutions comprising Workspace ONE Unified Endpoint Management, Access, Intelligent Hub, Horizon, Mobile Threat Defence, and Digital Employee Experience Management.

VMware, Inc. Fundamentals Summary

How do VMware's earnings and revenue compare to its market cap?
VMW fundamental statistics
Market capUS$61.52b
Earnings (TTM)US$1.43b
Revenue (TTM)US$13.61b
43.1x
P/E Ratio
4.5x
P/S Ratio

Is VMW overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report (TTM)
VMW income statement (TTM)
RevenueUS$13.61b
Cost of RevenueUS$2.54b
Gross ProfitUS$11.07b
Other ExpensesUS$9.64b
EarningsUS$1.43b

Last Reported Earnings

Aug 04, 2023

Next Earnings Date

n/a

Earnings per share (EPS)3.30
Gross Margin81.33%
Net Profit Margin10.48%
Debt/Equity Ratio410.2%

How did VMW perform over the long term?

See historical performance and comparison

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2023/11/23 21:21
End of Day Share Price 2023/11/21 00:00
Earnings2023/08/04
Annual Earnings2023/02/03

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

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Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

VMware, Inc. is covered by 43 analysts. 13 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Adam ShepherdArete Research Services LLP
Jayson NolandBaird
Raimo LenschowBarclays