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

In the latest trading session, VMware (VMW) closed at $203.64, marking a -0.91% move from the previous day. This change lagged the S&P 500's 0.58% loss on the day. At the same time, the Dow lost 0.38%, and the tech-heavy Nasdaq lost 1.04%.

Prior to today's trading, shares of the cloud computing company had gained 9.27% over the past month. This has outpaced the Computer and Technology sector's loss of 1.99% and the S&P 500's loss of 0.88% in that time.

VMW will be looking to display strength as it nears its next earnings release, which is expected to be May 30, 2019. On that day, VMW is projected to report earnings of $1.27 per share, which would represent year-over-year growth of 0.79%. Meanwhile, our latest consensus estimate is calling for revenue of $2.24 billion, up 11.75% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.49 per share and revenue of $10.02 billion. These totals would mark changes of +2.53% and +11.71%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for VMW. These revisions help to show the ever-changing nature of near-term business trends. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.43% lower within the past month. VMW is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, VMW is currently trading at a Forward P/E ratio of 31.65. Its industry sports an average Forward P/E of 32, so we one might conclude that VMW is trading at a discount comparatively.

Meanwhile, VMW's PEG ratio is currently 2.36. 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 2.27 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 96, which puts it in the top 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.

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

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VMware, Inc. (VMW): Free Stock Analysis Report
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