VMware (VMW) closed the most recent trading day at $123.74, moving -0.98% from the previous trading session. This change was narrower than the S&P 500’s daily loss of 1.89%. Meanwhile, the Dow lost 1.3%, and the Nasdaq, a tech-heavy index, lost 0.17%.
Heading into today, shares of the cloud computing company had gained 6.9% over the past month, outpacing the Computer and Technology sector’s loss of 6.14% and the S&P 500’s loss of 1.79% in that time.
Wall Street will be looking for positivity from VMware as it approaches its next earnings report date. The company is expected to report EPS of $1.97, down 10.86% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.52 billion, up 6.93% from the year-ago period.
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.
Any recent changes to analyst estimates for VMware should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. VMware currently has a Zacks Rank of #2 (Buy).
Looking at its valuation, VMware is holding a Forward P/E ratio of 17.35. For comparison, its industry has an average Forward P/E of 35.13, which means VMware is trading at a discount to the group.
It is also worth noting that VMW currently has a PEG ratio of 1.37. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. VMW’s industry had an average PEG ratio of 2.64 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 99, which puts it in the top 39% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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