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VMware (VMW) to Report Q1 Earnings: What's in the Cards?

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VMware (VMW - Free Report) is slated to release first-quarter fiscal 2023 results on May 26.

For the to-be-reported quarter, total revenues are expected at roughly $3.185 billion, suggesting more than 6.5% year-over-year growth. Non-GAAP earnings are expected at $1.56 per share.

The Zacks Consensus Estimate for quarterly earnings has been unchanged over the past 30 days at $1.57 per share, suggesting a 10.8% decline from the figure reported in the year-ago quarter.

The consensus mark for revenues is pegged at $3.19 billion, indicating a 6.42% increase from the year-ago reported number.
 

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VMware’s earnings beat the Zacks Consensus Estimate in all the past four quarters, the average earnings surprise being 5.85%.

Let’s see how things have shaped up before this announcement.

Key Factors to Note

VMware’s strong product portfolio, along with the robust uptake of cloud and security solutions, is expected to have driven the top line in the first quarter of fiscal 2023.

VMW’s widening cloud customer base is being driven by partnerships. The availability of VMware Cloud on hyperscaler clouds, data centers, sovereign clouds, telcos and the edge is expected to have driven the top line in the to-be-reported quarter.

The company is gaining from the ongoing cloud-based digital transformation and the increasing traction witnessed for subscription and software-as-a-service (SaaS) offerings. The subscription and SaaS business is being driven by the robust uptake of modern applications, VMware Cloud Provider Program, End-User Computing, Carbon Black and VMware Cloud on Amazon Web Services.

VMware expects Subscription, SaaS and license revenues to be $1.55 billion in the fiscal first quarter, indicating more than 12% year-over-year growth.

VMware is likely to have benefited from continued momentum in the company’s Tanzu platform across key verticals like financial services.

What Our Model Unveils

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here.

VMware has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:

NVIDIA (NVDA - Free Report) has an Earnings ESP of +2.57% and a Zacks Rank #3.

NVIDIA is scheduled to release first-quarter fiscal 2023 results on May 25. NVDA shares have been down 43.2% year to date (YTD) compared with the Zacks Computer and Technology sector’s fall of 28.6% over the same period.

Veeva Systems (VEEV - Free Report) has an Earnings ESP of +0.36% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Veeva is scheduled to release first-quarter fiscal 2023 results on Jun 1. VEEV shares have fallen 35.6% YTD.

Samsara (IOT - Free Report) has an Earnings ESP of +21.05% and a Zacks Rank #2.

Samsara is scheduled to release first-quarter fiscal 2023 results on Jun 2. IOT shares have been down 62% YTD.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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