Does VMware’s Stock Have An Upside Potential?

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[Update 01/12/2022] VMware stock

At the current price close to $120, VMware stock (NYSE:VMW) has more than 20% upside potential compared to Trefis. VMware Evaluation of $153. In its latest earnings for the third quarter of FY 2022 (ending October 2021), the company surpassed consensus estimates for both revenue and valuation. Revenue for the third quarter was $3.19 billion, an increase of 11%. The subscription and SaaS segment drove growth with revenue growth of 21% year over year. Remaining performance liability was $11.12 billion, up 9% year over year.

Overall, we expect VMware’s Revenue Driven by growth in the subscription and SaaS segment, up 9.4% for FY2022 (ending January 2022) driven by growth in the subscription and SaaS segment, while net income is expected to be at $2.4 billion, its EPS figure rose to $5.75 in FY22 Is. We expect revenue to grow to $13.7 billion and net income to $13.7 billion in fiscal 2023. This would take the EPS for fiscal year 2023 to $6.42, coupled with a P/E multiplier of 23.8x. VMware Evaluation About $153, which is 20% more than the current market price.

Below you’ll find our previous coverage of VMware’s stock where you can track our outlook over time.

[Update 6/18/2021] VMware stock to see moderate growth?

VMware (NYSE:VMW)The cloud computing and virtualization technology company, has seen its stock rise 14% — rising from about $138 to $157 since the end of fiscal 2021 (ending January 2021). VMware’s revenue and earnings benefited from the pandemic as the lockdown fueled the digitization of organizations with a push for remote working. The momentum continued in Q1 2022 (ending April 2022) as the company posted revenue growth of 9% yoy to $3 billion. The subscription and SaaS segment saw the highest growth of 29% in revenue to $741 million. Earnings for Q1 2022 (ending April 2022) increased to $1.01 compared to $0.92 in the same quarter last year.

We expect VMware’s revenue to grow 8.3% to $12.7 billion for fiscal year 2022 (ending January 2022). In addition, its net income is expected to be $2.1 billion, boosting its EPS figure to $5.03 in fiscal 2022, which, combined with a P/E multiple of 34.7x, would put VMware’s valuation at approximately $174, Which is 11% more than the current market. Price.

[Updated 4/8/2021] VMware stock to cross $170?

At the current price of approximately $152 per share, we believe VMware stock (NYSE:VMW) has good growth potential in the near future. VMW stock has remained flat against the S&P500 since the end of fiscal 2019 (ended January 2019), having gained 49% over the same period. Revenue grew in FY21 (ending January 2021) as the COVID-19 pandemic pushed individuals and organizations towards digitization and cloud offerings. Revenue growth was led by the subscription and SaaS segment which grew approximately 38% over the previous year.

On July 15, 2020, Dell filed a Form 13D/A with the SEC disclosing that they were exploring a spin-off of their 81 percent equity ownership in VMware. The company has reiterated for months that there will be no change in the business partnership between the companies. In February 2021, VMware’s interim CEO Zane Rowe said that the company is “making progress” on its potential spin-off from Dell Technologies.
and believes it could be a value-add to VMware and its shareholders. The spin-off is not expected before September 2021 as Dell wants to qualify it as tax-free for income tax purposes. Since details on a potential spin-off are still under evaluation, how this will affect VMware is not yet known.

VMware’s revenue grew from $9.6 billion in FY19 (ended January 2019) to $11.8 billion in FY21 (end January 2021). Net income margin increased from 16.5% in FY19 to 17.5% in FY21. On a per-share basis, earnings rose from $3.99 to $4.80, while the company saw a 1.8% decline in outstanding shares.

During the same period, the P/E multiplier fell from 37.5x to about 28.1x. The P/E improved slightly in FY2022 and is currently at around 31.1x.

Where is the stock going?

The global spread of the coronavirus led to lockdowns in various cities across the world, affecting industrial and economic activities. This, in turn, fueled the digitization of organizations with a push for remote working. VMware’s revenue rose 9% to $11.8 billion for fiscal 2021, while GAAP operating income rose 66% year over year to $2.4 billion. Earnings fell to $4.90 compared to $15.37 in the previous year. Earnings were higher in fiscal 2020 (ending January 2020) as $4.9 billion of discrete tax benefits were recognized with deferred tax assets due to intra-group transfers of certain intellectual property rights to their Irish subsidiary.

The actual recovery and its timing depends on the comprehensive containment of the coronavirus. our dashboard Trends in US Covid-19 cases Provides an overview of how the pandemic is spreading in the US and contrasts with trends in Brazil and Russia. Following the Fed stimulus – which set a floor on fears – the market is set to “look” at the current weak period and take a longer-term outlook. With investors’ attention focused on 2021 results, valuations become critical in finding value. However, market sentiment may be volatile and signs of a rise in new cases may once again scare investors. We expect VMW’s revenue to grow 8.3% annually to $12.7 billion in fiscal 2022. In addition, its net income is expected to rise to $2.1 billion, raising its EPS figure to $5.03, which combined with a P/E multiple of 34.1x would give VMware a valuation of about $172 per share, up from the current 13% more than the market price. ,

While VMW stock is likely to rise higher in the near term, there are other stocks that offer a . look like A better bet than VMW stock, as well, VMware Peer Comparison Summarizes how the company performs against peers on key metrics.

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