VMware (VMW) closed the most recent trading day at $111.05, moving -0.18% from the previous trading session. This change was narrower than the S&P 500’s daily loss of 0.27%. Elsewhere, the Dow gained 0.4%, while the tech-heavy Nasdaq lost 0.18%.
Heading into today, shares of the cloud computing company had lost 2.42% over the past month, lagging the Computer and Technology sector’s gain of 7.53% and the S&P 500’s gain of 7.36% in that time.
VMware will be looking to display strength as it nears its next earnings release. On that day, VMware is projected to report earnings of $1.57 per share, which would represent a year-over-year decline of 10.8%. Our most recent consensus estimate is calling for quarterly revenue of $3.19 billion, up 6.42% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.03 per share and revenue of $13.74 billion, which would represent changes of -3.03% and +6.95%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for VMware. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.16% lower. VMware is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, VMware is currently trading at a Forward P/E ratio of 15.82. This valuation marks a discount compared to its industry’s average Forward P/E of 30.57.
Also, we should mention that VMW has a PEG ratio of 1.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. VMW’s industry had an average PEG ratio of 2.55 as of yesterday’s close.
The Computer – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 159, putting it in the bottom 38% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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