What Analysts See in VMware After Earnings
Overall, this was a fairly positive quarter for VMware, and both analysts and investors alike were pleased with the results as the stock rallied on Tuesday.
VMware Inc. (NYSE: VMW) released its second-quarter earnings report after the markets closed on Monday. Overall, this was a fairly positive quarter for VMware. The company built up its balance sheet, while looking to return over $1 billion to shareholders in its recently announced repurchase plan. Both analysts and investors alike were pleased with the results as the stock gained nearly 10% on Tuesday.
24/7 Wall St. has included some key highlights from the earnings report, as well as what analysts were saying after the fact.
The company said that it had $0.97 in earnings per share (EPS) on $1.69 billion in revenue. Consensus estimates from Thomson Reuters had called for $0.95 in EPS on revenue of $1.68 billion. In the same period of last year, VMware posted EPS of $0.93 and $1.59 billion in revenue.
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Licensing revenues totaled $644 million and Service revenues topped out at $1.05 billion for the quarter. Each category increased from the previous year, when VMware had Licensing revenues of $638 million and Service revenues of $959 million.
Last month, the company made announcements that it would further innovate its Business Mobility strategy and product offerings. VMware plans to have a new endpoint security solution powered by Tanium called VMware TrustPoint, which will deliver an integrated solution for unified endpoint management and security.
Previously, VMware announced that it will return about $1.2 billion to shareholders via its repurchase plan. Keep in mind that the company has a market cap of roughly $29 billion, making this repurchase plan about 4% of the total cap.
A few analysts weighed in on VMware following the earnings report:
- Bernstein has a Market Perform rating and raised its price target to $67 from $58.
- BMO has a Market Perform rating and raised its price target to $70 from $55.
- Cowen raised a price target to $68 from $61.
- Deutsche Bank has a Hold rating and raised its price target to $65 from $55.
- Jefferies raised its price target to $84 from $83.
- Maxim has a Hold rating and raised its price target to $73 from $68.
- Mizuho raised its price target to $61 from $52.
- Nomura maintained its price target at $60.
- SunTrust Robinson raised its price target to $64 from $58.
- UBS raised its price target to $77 from $72.
Shares of VMware closed Tuesday up about 9% at $68.23, with a consensus analyst price target of $61.90 and a 52-week trading range of $43.25 to $93.43.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
