VMware (NYSE:VMW) was downgraded by Zacks Investment Research from a “hold” rating to a “strong sell” rating in a report released on Friday.
According to Zacks, “VMware faces intense competition from Microsoft and Citrix Systems which is a major headwind for the company. Several of the growth engines that the company is relying on could take longer to yield results. Thus, heavy spending on R&D may weigh heavily on its margins in the near future. Growth in license bookings has been muted for the last few quarters which is a concern. However, the company benefits from innovative product pipeline and strategic partnerships. Shares have outperformed the industry in the past one year.”
A number of other research analysts also recently commented on VMW. Stifel Nicolaus restated a “buy” rating and set a $152.00 price objective (up from $150.00) on shares of VMware in a research note on Monday, November 27th. Bank of America increased their price target on VMware from $125.00 to $148.00 and gave the stock a “buy” rating in a research note on Monday, November 27th. Drexel Hamilton restated a “buy” rating and issued a $120.00 price objective on shares of VMware in a report on Thursday, November 30th. Barclays restated a “buy” rating on shares of VMware in a report on Friday, November 10th. Finally, Citigroup upped their price objective on VMware to $145.00 and gave the company a “buy” rating in a report on Friday, December 1st. Two research analysts have rated the stock with a sell rating, seven have assigned a hold rating and twenty-one have given a buy rating to the stock. The company currently has a consensus rating of “Buy” and an average target price of $130.84.
VMware (NYSE:VMW) last released its quarterly earnings results on Thursday, November 30th. The virtualization software provider reported $1.34 EPS for the quarter, topping the consensus estimate of $1.27 by $0.07. VMware had a return on equity of 18.57% and a net margin of 18.97%. The firm had revenue of $1.98 billion for the quarter, compared to analyst estimates of $1.97 billion. During the same period in the previous year, the company posted $1.14 EPS. VMware’s revenue for the quarter was up 11.1% on a year-over-year basis. sell-side analysts anticipate that VMware will post 3.77 earnings per share for the current year.
In related news, COO Sanjay Poonen sold 2,764 shares of the stock in a transaction that occurred on Friday, December 8th. The stock was sold at an average price of $118.50, for a total transaction of $327,534.00. Following the completion of the sale, the chief operating officer now owns 189,391 shares in the company, valued at approximately $22,442,833.50. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, COO Rangarajan (Raghu) Raghuram sold 23,381 shares of the stock in a transaction that occurred on Tuesday, December 12th. The shares were sold at an average price of $120.40, for a total value of $2,815,072.40. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 38,726 shares of company stock valued at $4,774,927. 34.40% of the stock is owned by corporate insiders.
Several hedge funds have recently made changes to their positions in VMW. Global Trust Asset Management LLC bought a new position in VMware during the fourth quarter worth about $138,000. Bronfman E.L. Rothschild L.P. lifted its stake in shares of VMware by 1,643.8% in the 3rd quarter. Bronfman E.L. Rothschild L.P. now owns 1,273 shares of the virtualization software provider’s stock valued at $139,000 after acquiring an additional 1,200 shares during the last quarter. Enterprise Financial Services Corp lifted its stake in shares of VMware by 3,975.6% in the 3rd quarter. Enterprise Financial Services Corp now owns 1,671 shares of the virtualization software provider’s stock valued at $182,000 after acquiring an additional 1,630 shares during the last quarter. Cadence Capital Management LLC bought a new position in shares of VMware in the 3rd quarter valued at $204,000. Finally, Argent Trust Co bought a new position in shares of VMware in the 3rd quarter valued at $205,000. Institutional investors own 22.40% of the company’s stock.
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VMware Company Profile
VMware, Inc is an information technology (IT) company. The Company is engaged in development and application of virtualization technologies with x86 server-based computing, separating application software from the underlying hardware. The Company offers various products, which allow organizations to manage IT resources across private clouds and multi-cloud, multi-device environments by leveraging synergies across three product categories: Software-Defined Data Center (SDDC), Hybrid Cloud Computing and End-User Computing (EUC).
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