NYSE:VMW

Stock Analysis Report

Executive Summary

VMware, Inc. provides software in the areas of hybrid cloud, multi-cloud, modern applications, networking and security, and digital workspaces in the United States and internationally.

Snowflake

Fundamentals

Outstanding track record and slightly overvalued.


Similar Companies

Share Price & News

How has VMware's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.8%

VMW

-0.9%

US Software

1.8%

US Market


1 Year Return

8.3%

VMW

22.0%

US Software

7.3%

US Market

Return vs Industry: VMW underperformed the US Software industry which returned 22% over the past year.

Return vs Market: VMW exceeded the US Market which returned 7.3% over the past year.


Shareholder returns

VMWIndustryMarket
7 Day-1.8%-0.9%1.8%
30 Day1.2%-0.7%-0.7%
90 Day-15.2%-4.2%0.06%
1 Year30.4%8.3%23.7%22.0%9.7%7.3%
3 Year151.2%108.7%119.6%111.0%46.3%36.9%
5 Year118.4%81.5%171.5%151.9%64.5%46.5%

Price Volatility Vs. Market

How volatile is VMware's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is VMware undervalued compared to its fair value and its price relative to the market?

9.95x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: VMW ($152.14) is trading above our estimate of fair value ($137.05)

Significantly Undervalued: VMW is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: VMW is good value based on its PE Ratio (9.9x) compared to the Software industry average (47.3x).

PE vs Market: VMW is good value based on its PE Ratio (9.9x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: VMW's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: VMW is overvalued based on its PB Ratio (12x) compared to the US Software industry average (5.5x).


Next Steps

Future Growth

How is VMware forecast to perform in the next 1 to 3 years based on estimates from 28 analysts?

-36.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VMW's earnings are forecast to decline over the next 3 years (-36.2% per year).

Earnings vs Market: VMW's earnings are forecast to decline over the next 3 years (-36.2% per year).

High Growth Earnings: VMW's earnings are forecast to decline over the next 3 years.

Revenue vs Market: VMW's revenue (9.2% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: VMW's revenue (9.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: VMW's Return on Equity is forecast to be very high in 3 years time (44.3%).


Next Steps

Past Performance

How has VMware performed over the past 5 years?

33.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: VMW's earnings have grown significantly by 33.9% per year over the past 5 years.

Accelerating Growth: VMW's earnings growth over the past year (293.5%) exceeds its 5-year average (33.9% per year).

Earnings vs Industry: VMW earnings growth over the past year (293.5%) exceeded the Software industry 19.1%.


Return on Equity

High ROE: VMW's Return on Equity (120.5%) is considered outstanding.


Return on Assets

ROA vs Industry: VMW has a higher Return on Assets than the Software industry average last year.


Return on Capital Employed

ROCE Improving: VMW has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is VMware's financial position?


Financial Position Analysis

Short Term Liabilities: VMW's short term assets ($5.6B) do not cover its short term liabilities ($5.9B)

Long Term Liabilities: VMW's short term assets (5.6B) do not cover its long term liabilities (9.3B)


Debt to Equity History and Analysis

Debt Level: VMW's debt to equity ratio (81.7%) is considered high

Reducing Debt: VMW's debt to equity ratio has increased from 20.8% to 81.7% over the past 5 years.

Debt Coverage: VMW's debt is well covered by operating cash flow (88.4%).

Interest Coverage: VMW's interest payments on its debt are well covered by EBIT (42.1x coverage).


Balance Sheet

Inventory Level: VMW has a low level of unsold assets or inventory.

Debt Coverage by Assets: VMW's debt is covered by short term assets (assets are 1.325710x debt).


Next Steps

Dividend

What is VMware's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.5%markettop25%3.7%industryaverage1.5%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate VMW's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate VMW's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if VMW's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if VMW's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of VMW's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of VMware's salary, the management and board of directors tenure and is there insider trading?

6.2yrs

Average management tenure


CEO

Pat Gelsinger (58yo)

7.1yrs

Tenure

US$23,569,191

Compensation

Mr. Patrick P. Gelsinger, also known as Pat, has been the Chief Executive Officer of VMware, Inc. since September 1, 2012. Mr. Gelsinger has more than 30 years of experience in general management and produ ...


CEO Compensation Analysis

Compensation vs. Market: Pat's total compensation ($USD23.57M) is about average for companies of similar size in the US market ($USD11.21M).

Compensation vs Earnings: Pat's compensation has increased by more than 20% in the past year.


Management Age and Tenure

6.2yrs

Average Tenure

52.5yo

Average Age

Experienced Management: VMW's management team is seasoned and experienced (6.2 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

60yo

Average Age

Experienced Board: VMW's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

Insider Buying: VMW insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$1,660,02415 Oct 19
Maurizio Carli
EntityIndividual
Role
Head of Sales
Executive Vice President of Worldwide Sales & Services
Shares10,616
Max PriceUS$156.37
SellUS$523,63305 Apr 19
Kevan Krysler
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer & Senior VP
Shares2,897
Max PriceUS$180.75
SellUS$5,062,40903 Apr 19
Maurizio Carli
EntityIndividual
Role
Head of Sales
Executive Vice President of Worldwide Sales & Services
Shares27,647
Max PriceUS$183.60
SellUS$4,565,00020 Mar 19
Sanjay Poonen
EntityIndividual
Role
Senior Key Executive
Chief Operating Officer of Customer Operations
Shares25,000
Max PriceUS$182.60
SellUS$308,38318 Mar 19
Amy Olli
EntityIndividual
Shares1,723
Max PriceUS$178.98
SellUS$948,96613 Mar 19
Maurizio Carli
EntityIndividual
Role
Head of Sales
Executive Vice President of Worldwide Sales & Services
Shares5,446
Max PriceUS$174.25
SellUS$5,408,74616 Jan 19
Maurizio Carli
EntityIndividual
Role
Head of Sales
Executive Vice President of Worldwide Sales & Services
Shares36,848
Max PriceUS$147.58
SellUS$2,386,10810 Jan 19
Sanjay Poonen
EntityIndividual
Role
Senior Key Executive
Chief Operating Officer of Customer Operations
Shares16,135
Max PriceUS$149.98
SellUS$5,600,00019 Dec 18
Michael Brown
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares35,000
Max PriceUS$160.00
SellUS$1,073,02014 Dec 18
Zane Rowe
EntityIndividual
Role
Chief Financial Officer
CFO & Executive VP
Shares6,500
Max PriceUS$165.08

Ownership Breakdown


Management Team

  • Pat Gelsinger (58yo)

    CEO & Director

    • Tenure: 7.1yrs
    • Compensation: US$23.57m
  • Maurizio Carli (60yo)

    Executive Vice President of Worldwide Sales & Services

    • Tenure: 3.5yrs
    • Compensation: US$11.59m
  • Scott Devine

    Co-Founder & Principal Engineer

    • Tenure: 21.8yrs
  • Paul Ziots

    Vice President of Investor Relations

    • Tenure: 0yrs
  • Zane Rowe (48yo)

    CFO & Executive VP

    • Tenure: 3.6yrs
    • Compensation: US$12.13m
  • Sanjay Poonen (49yo)

    Chief Operating Officer of Customer Operations

    • Tenure: 6.2yrs
    • Compensation: US$9.47m
  • Raghu Raghuram (56yo)

    Chief Operating Officer of Products & Cloud Services

    • Tenure: 9.8yrs
    • Compensation: US$10.74m
  • Bask Iyer

    Chief Information Officer & Chief Digital Transformation Officer

    • Tenure: 4.6yrs
  • Kevan Krysler (48yo)

    Chief Accounting Officer & Senior VP

    • Tenure: 6.2yrs
  • Greg Lavender

    Senior VP & CTO

    • Tenure: 0.8yrs

Board Members

  • Egon Durban (46yo)

    Director

    • Tenure: 3.1yrs
  • Pat Gelsinger (58yo)

    CEO & Director

    • Tenure: 7.1yrs
    • Compensation: US$23.57m
  • Don Carty (73yo)

    Independent Director

    • Tenure: 3.8yrs
    • Compensation: US$357.69k
  • Paul Sagan (60yo)

    Lead Director

    • Tenure: 4.7yrs
    • Compensation: US$648.91k
  • Michael Dell (54yo)

    Chairman

    • Tenure: 3.1yrs
  • Mike Brown (73yo)

    Independent Director

    • Tenure: 12.5yrs
    • Compensation: US$400.41k
  • Karen Dykstra (60yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: US$641.94k
  • Tony Bates (52yo)

    Independent Director

    • Tenure: 3.7yrs
    • Compensation: US$412.69k
  • Marianne Brown (60yo)

    Director

    • Tenure: 0yrs

Company Information

VMware, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: VMware, Inc.
  • Ticker: VMW
  • Exchange: NYSE
  • Founded: 1998
  • Industry: Systems Software
  • Sector: Software
  • Market Cap: US$62.169b
  • Shares outstanding: 408.63m
  • Website: https://www.vmware.com

Number of Employees


Location

  • VMware, Inc.
  • 3401 Hillview Avenue
  • Palo Alto
  • California
  • 94304
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BZF1DB (Deutsche Boerse AG)YesClass A Common StockDEEURAug 2007
VMWNYSE (New York Stock Exchange)YesClass A Common StockUSUSDAug 2007
0LQOLSE (London Stock Exchange)YesClass A Common StockGBUSDAug 2007
VMW *BMV (Bolsa Mexicana de Valores)YesClass A Common StockMXMXNAug 2007

Biography

VMware, Inc. provides software in the areas of hybrid cloud, multi-cloud, modern applications, networking and security, and digital workspaces in the United States and internationally. The company offers c ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 23:55
End of Day Share Price2019/10/18 00:00
Earnings2019/08/02
Annual Earnings2019/02/01


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 here.