Vmware Inc (VMW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VMW - US9285634021 - Common Stock
142.48 USD
-7.43 (-4.96%)
143 USD
+0.52 (+0.36%)
VMW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 277 industry peers in the Software industry. While VMW belongs to the best of the industry regarding profitability, there are concerns on its financial health. VMW has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year VMW was profitable.
- VMW had a positive operating cash flow in the past year.
- VMW had positive earnings in each of the past 5 years.
- In the past 5 years VMW always reported a positive cash flow from operatings.
1.2 Ratios
- VMW has a Return On Assets of 4.43%. This is amongst the best in the industry. VMW outperforms 82.92% of its industry peers.
- VMW has a better Return On Equity (55.99%) than 97.86% of its industry peers.
- The Return On Invested Capital of VMW (7.86%) is better than 85.05% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for VMW is in line with the industry average of 10.78%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.43% | ||
| ROE | 55.99% | ||
| ROIC | 7.86% |
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
1.3 Margins
- The Profit Margin of VMW (10.48%) is better than 84.70% of its industry peers.
- VMW's Profit Margin has improved in the last couple of years.
- VMW has a Operating Margin of 14.00%. This is amongst the best in the industry. VMW outperforms 84.70% of its industry peers.
- In the last couple of years the Operating Margin of VMW has declined.
- With an excellent Gross Margin value of 81.19%, VMW belongs to the best of the industry, outperforming 86.83% of the companies in the same industry.
- VMW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14% | ||
| PM (TTM) | 10.48% | ||
| GM | 81.19% |
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VMW is destroying value.
- The number of shares outstanding for VMW has been increased compared to 1 year ago.
- VMW has a better debt/assets ratio than last year.
2.2 Solvency
- VMW has an Altman-Z score of 1.85. This is not the best score and indicates that VMW is in the grey zone with still only limited risk for bankruptcy at the moment.
- With a Altman-Z score value of 1.85, VMW perfoms like the industry average, outperforming 48.40% of the companies in the same industry.
- The Debt to FCF ratio of VMW is 2.25, which is a good value as it means it would take VMW, 2.25 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 2.25, VMW is in the better half of the industry, outperforming 73.67% of the companies in the same industry.
- A Debt/Equity ratio of 3.73 is on the high side and indicates that VMW has dependencies on debt financing.
- The Debt to Equity ratio of VMW (3.73) is worse than 87.19% of its industry peers.
- Although VMW does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.73 | ||
| Debt/FCF | 2.25 | ||
| Altman-Z | 1.85 |
ROIC/WACC0.77
WACC10.18%
2.3 Liquidity
- VMW has a Current Ratio of 0.87. This is a bad value and indicates that VMW is not financially healthy enough and could expect problems in meeting its short term obligations.
- VMW has a worse Current ratio (0.87) than 82.56% of its industry peers.
- VMW has a Quick Ratio of 0.87. This is a bad value and indicates that VMW is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Quick ratio value of 0.87, VMW is not doing good in the industry: 81.49% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 3.90% over the past year.
- VMW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.63% yearly.
- The Revenue has been growing slightly by 3.56% in the past year.
- VMW shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.17% yearly.
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%
3.2 Future
- The Earnings Per Share is expected to grow by 7.04% on average over the next years.
- Based on estimates for the next years, VMW will show a quite strong growth in Revenue. The Revenue will grow by 8.40% on average per year.
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 20.59, which indicates a rather expensive current valuation of VMW.
- Based on the Price/Earnings ratio, VMW is valued cheaper than 85.77% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 26.94, VMW is valued a bit cheaper.
- VMW is valuated rather expensively with a Price/Forward Earnings ratio of 17.40.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of VMW indicates a rather cheap valuation: VMW is cheaper than 85.41% of the companies listed in the same industry.
- VMW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 17.4 |
4.2 Price Multiples
- VMW's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. VMW is cheaper than 85.41% of the companies in the same industry.
- VMW's Price/Free Cash Flow ratio is rather cheap when compared to the industry. VMW is cheaper than 92.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.2 | ||
| EV/EBITDA | 20.29 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- VMW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.08
PEG (5Y)4.45
EPS Next 2Y12.07%
EPS Next 3Y8.72%
5. Dividend
5.1 Amount
- VMW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
142.48
-7.43 (-4.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)11-30 2023-11-30/amc
Earnings (Next)02-29 2024-02-29/amc
Inst Owners0.21%
Inst Owner Change0%
Ins Owners0.31%
Ins Owner Change0%
Market Cap61.52B
Revenue(TTM)13.61B
Net Income(TTM)1.43B
Analysts53.33
Price Target169.22 (18.77%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.18%
Min EPS beat(2)-5.43%
Max EPS beat(2)5.79%
EPS beat(4)2
Avg EPS beat(4)0.57%
Min EPS beat(4)-7.68%
Max EPS beat(4)9.61%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-2.31%
Min Revenue beat(2)-2.35%
Max Revenue beat(2)-2.27%
Revenue beat(4)1
Avg Revenue beat(4)-2.07%
Min Revenue beat(4)-5%
Max Revenue beat(4)1.34%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)9.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.95%
EPS NY rev (1m)0%
EPS NY rev (3m)2.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 17.4 | ||
| P/S | 4.52 | ||
| P/FCF | 13.2 | ||
| P/OCF | 12.08 | ||
| P/B | 24.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.29 |
EPS(TTM)6.92
EY4.86%
EPS(NY)8.19
Fwd EY5.75%
FCF(TTM)10.8
FCFY7.58%
OCF(TTM)11.79
OCFY8.28%
SpS31.52
BVpS5.9
TBVpS-17.18
PEG (NY)2.08
PEG (5Y)4.45
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.43% | ||
| ROE | 55.99% | ||
| ROCE | 9.79% | ||
| ROIC | 7.86% | ||
| ROICexc | 12.08% | ||
| ROICexgc | 56.72% | ||
| OM | 14% | ||
| PM (TTM) | 10.48% | ||
| GM | 81.19% | ||
| FCFM | 34.25% |
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
ROICexc(3y)12.19%
ROICexc(5y)13.94%
ROICexgc(3y)39.61%
ROICexgc(5y)182.58%
ROCE(3y)11.7%
ROCE(5y)12.97%
ROICexgc growth 3Y-2.41%
ROICexgc growth 5YN/A
ROICexc growth 3Y8.25%
ROICexc growth 5Y-17.26%
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
F-Score6
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.73 | ||
| Debt/FCF | 2.25 | ||
| Debt/EBITDA | 2.95 | ||
| Cap/Depr | 32.82% | ||
| Cap/Sales | 3.16% | ||
| Interest Coverage | 6.23 | ||
| Cash Conversion | 158.38% | ||
| Profit Quality | 326.93% | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 1.85 |
F-Score6
WACC10.18%
ROIC/WACC0.77
Cap/Depr(3y)34.45%
Cap/Depr(5y)34.05%
Cap/Sales(3y)3.06%
Cap/Sales(5y)2.88%
Profit Quality(3y)236.48%
Profit Quality(5y)194.34%
High Growth Momentum
Growth
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%
EBIT growth 1Y-16.59%
EBIT growth 3Y10.12%
EBIT growth 5Y2.37%
EBIT Next Year34.25%
EBIT Next 3Y19.61%
EBIT Next 5YN/A
FCF growth 1Y13.1%
FCF growth 3Y2.33%
FCF growth 5Y5.43%
OCF growth 1Y14.56%
OCF growth 3Y3.56%
OCF growth 5Y5.97%
Vmware Inc / VMW FAQ
What is the ChartMill fundamental rating of Vmware Inc (VMW) stock?
ChartMill assigns a fundamental rating of 5 / 10 to VMW.
What is the valuation status for VMW stock?
ChartMill assigns a valuation rating of 5 / 10 to Vmware Inc (VMW). This can be considered as Fairly Valued.
Can you provide the profitability details for Vmware Inc?
Vmware Inc (VMW) has a profitability rating of 8 / 10.
What are the PE and PB ratios of Vmware Inc (VMW) stock?
The Price/Earnings (PE) ratio for Vmware Inc (VMW) is 20.59 and the Price/Book (PB) ratio is 24.15.
What is the expected EPS growth for Vmware Inc (VMW) stock?
The Earnings per Share (EPS) of Vmware Inc (VMW) is expected to grow by 9.9% in the next year.