VMware Valuation

Is VMW undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of VMW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: VMW ($142.48) is trading below our estimate of fair value ($228.12)

Significantly Below Fair Value: VMW is trading below fair value by more than 20%.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for VMW?

Other financial metrics that can be useful for relative valuation.

VMW key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue4.9x
Enterprise Value/EBITDA23.7x
PEG Ratio3x

Price to Earnings Ratio vs Peers

How does VMW's PE Ratio compare to its peers?

The above table shows the PE ratio for VMW vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average49.2x
FTNT Fortinet
44.2x14.0%US$50.7b
PANW Palo Alto Networks
39.6x-15.0%US$90.1b
CHKP Check Point Software Technologies
21.7x3.3%US$18.3b
NOW ServiceNow
91.2x5.2%US$157.9b
VMW VMware
43.1x14.2%US$61.5b

Price-To-Earnings vs Peers: VMW is good value based on its Price-To-Earnings Ratio (43.1x) compared to the peer average (69.1x).


Price to Earnings Ratio vs Industry

How does VMW's PE Ratio compare vs other companies in the US Software Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a15.7%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a15.7%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: VMW is expensive based on its Price-To-Earnings Ratio (43.1x) compared to the US Software industry average (41.9x).


Price to Earnings Ratio vs Fair Ratio

What is VMW's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

VMW PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio43.1x
Fair PE Ratio41.9x

Price-To-Earnings vs Fair Ratio: VMW is expensive based on its Price-To-Earnings Ratio (43.1x) compared to the estimated Fair Price-To-Earnings Ratio (41.9x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst VMW forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Currentn/a
US$158.83
0%
10.4%US$182.00US$139.50n/a10
Apr ’25n/a
US$158.83
0%
10.4%US$182.00US$139.50n/a10
Mar ’25n/a
US$158.83
0%
10.4%US$182.00US$139.50n/a10
Feb ’25n/a
US$158.83
0%
10.4%US$182.00US$139.50n/a10
Jan ’25n/a
US$158.83
0%
10.4%US$182.00US$139.50n/a10
Dec ’24n/a
US$158.83
0%
10.4%US$182.00US$139.50n/a10
Nov ’24US$146.14
US$158.83
+8.7%
10.4%US$182.00US$139.50n/a10
Oct ’24US$166.48
US$158.83
-4.6%
10.4%US$182.00US$139.50n/a10
Sep ’24US$164.10
US$155.08
-5.5%
10.0%US$182.00US$139.50n/a10
Aug ’24US$158.96
US$143.33
-9.8%
5.6%US$161.00US$134.00n/a10
Jul ’24US$143.69
US$140.14
-2.5%
6.4%US$161.00US$124.72n/a9
Jun ’24US$133.94
US$136.97
+2.3%
6.1%US$151.00US$124.72n/a8
May ’24US$126.98
US$139.82
+10.1%
7.6%US$161.00US$125.00n/a9
Apr ’24US$124.85
US$143.19
+14.7%
5.3%US$161.00US$135.00n/a8
Mar ’24US$110.09
US$140.94
+28.0%
3.3%US$147.00US$135.00n/a8
Feb ’24US$123.34
US$139.33
+13.0%
3.5%US$147.00US$131.00n/a9
Jan ’24US$122.76
US$139.33
+13.5%
3.5%US$147.00US$131.00n/a9
Dec ’23US$121.68
US$139.70
+14.8%
3.4%US$147.00US$131.00n/a10
Nov ’23US$112.62
US$139.03
+23.5%
4.4%US$147.00US$120.00US$146.1416
Oct ’23US$106.46
US$139.03
+30.6%
4.4%US$147.00US$120.00US$166.4816
Sep ’23US$114.82
US$138.16
+20.3%
4.9%US$147.00US$120.00US$164.1017
Aug ’23US$116.17
US$139.38
+20.0%
6.0%US$160.00US$120.00US$158.9618
Jul ’23US$114.06
US$139.88
+22.6%
6.0%US$160.00US$120.00US$143.6919
Jun ’23US$129.41
US$140.25
+8.4%
6.2%US$160.00US$120.00US$133.9419
May ’23US$108.04
US$140.54
+30.1%
11.7%US$175.00US$113.00US$126.9830
Apr ’23US$114.21
US$141.33
+23.7%
11.9%US$175.00US$113.00US$124.8531

Analyst Forecast: Target price is less than 20% higher than the current share price.


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