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VMware (VMW) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, VMware (VMW - Free Report) closed at $138.88, marking a -0.68% move from the previous day. This move lagged the S&P 500's daily loss of 0.38%. Elsewhere, the Dow lost 0.85%, while the tech-heavy Nasdaq added 0.43%.

Coming into today, shares of the cloud computing company had lost 8.67% in the past month. In that same time, the Computer and Technology sector gained 6.92%, while the S&P 500 gained 6.78%.

VMW will be looking to display strength as it nears its next earnings release. In that report, analysts expect VMW to post earnings of $1.45 per share. This would mark a year-over-year decline of 9.38%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.80 billion, up 14.86% from the year-ago period.

VMW's full-year Zacks Consensus Estimates are calling for earnings of $6.01 per share and revenue of $11.44 billion. These results would represent year-over-year changes of -3.69% and +11.83%, respectively.

Investors might also notice recent changes to analyst estimates for VMW. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 remained stagnant. VMW currently has a Zacks Rank of #3 (Hold).

Digging into valuation, VMW currently has a Forward P/E ratio of 23.26. This valuation marks a discount compared to its industry's average Forward P/E of 32.98.

Meanwhile, VMW's PEG ratio is currently 1.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computer - Software industry currently had an average PEG ratio of 2.79 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 154, which puts it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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