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VMware (VMW) Stock Sinks As Market Gains: What You Should Know

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VMware closed at $128.48 in the latest trading session, marking a -0.51% move from the prior day. This change lagged the S&P 500's daily gain of 1.89%. Elsewhere, the Dow gained 1.17%, while the tech-heavy Nasdaq added 0.75%.

Heading into today, shares of the cloud computing company had gained 11.44% over the past month, outpacing the Computer and Technology sector's loss of 12.51% and the S&P 500's loss 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 $1.97 per share, which would represent a year-over-year decline of 10.86%. Meanwhile, our latest consensus estimate is calling for revenue of $3.52 billion, up 6.92% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.20 per share and revenue of $12.84 billion. These totals would mark changes of 0% and +9.12%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for VMware. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0.01% lower within the past month. VMware is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note VMware's current valuation metrics, including its Forward P/E ratio of 17.93. This represents a discount compared to its industry's average Forward P/E of 33.45.

Investors should also note that VMW has a PEG ratio of 1.42 right now. 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 94, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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