Vmware Inc (VMW) Stock Fundamental Analysis
USA - NYSE:VMW - US9285634021 - Common Stock
142.48 USD
-7.43 (-4.96%)
143 USD
+0.52 (+0.36%)
Overall VMW gets a fundamental rating of 5 out of 10. We evaluated VMW against 285 industry peers in the Software industry. VMW scores excellent on profitability, but there are concerns on its financial health. VMW is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year VMW was profitable.
In the past year VMW had a positive cash flow from operations.
In the past 5 years VMW has always been profitable.
VMW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
VMW has a better Return On Assets (4.43%) than 82.92% of its industry peers.
Looking at the Return On Equity, with a value of 55.99%, VMW belongs to the top of the industry, outperforming 97.86% of the companies in the same industry.
The Return On Invested Capital of VMW (7.86%) is better than 85.05% of its industry peers.
VMW had an Average Return On Invested Capital over the past 3 years of 9.40%. This is below the industry average of 11.90%.
| 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
VMW has a Profit Margin of 10.48%. This is amongst the best in the industry. VMW outperforms 84.70% of its industry peers.
VMW's Profit Margin has improved in the last couple of years.
VMW's Operating Margin of 14.00% is amongst the best of the industry. VMW outperforms 84.70% of its industry peers.
VMW's Operating Margin has declined in the last couple of years.
VMW has a Gross Margin of 81.19%. This is amongst the best in the industry. VMW outperforms 86.83% of its industry peers.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), VMW is destroying value.
VMW has more shares outstanding than it did 1 year ago.
VMW has more shares outstanding than it did 5 years ago.
VMW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 1.85 indicates that VMW is not a great score, but indicates 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.
VMW has a debt to FCF ratio of 2.25. This is a good value and a sign of high solvency as VMW would need 2.25 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.25, VMW is doing good in the industry, outperforming 73.67% of the companies in the same industry.
VMW has a Debt/Equity ratio of 3.73. This is a high value indicating a heavy dependency on external financing.
VMW has a worse Debt to Equity ratio (3.73) than 87.19% of its industry peers.
Even though the debt/equity ratio score it not favorable for VMW, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| 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.
The Current ratio of VMW (0.87) is worse 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.
VMW has a worse Quick ratio (0.87) than 81.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
VMW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.90%.
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.
Measured over the past years, VMW shows a quite strong growth in Revenue. The Revenue has been growing by 11.17% on average per year.
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.
VMW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.40% yearly.
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 20.59, the valuation of VMW can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of VMW indicates a rather cheap valuation: VMW is cheaper than 85.77% of the companies listed in the same industry.
VMW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.42.
A Price/Forward Earnings ratio of 17.40 indicates a rather expensive valuation of VMW.
VMW's Price/Forward Earnings ratio is rather cheap when compared to the industry. VMW is cheaper than 85.41% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of VMW to the average of the S&P500 Index (22.94), we can say VMW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 17.4 |
4.2 Price Multiples
85.41% of the companies in the same industry are more expensive than VMW, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, VMW is valued cheaply inside the industry as 92.53% of the companies are valued more expensively.
| 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 VMW does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of VMW 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
No dividends for VMW!.
| 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)
Earnings (Next)
Inst Owners0.21%
Inst Owner Change0%
Ins Owners0.31%
Ins Owner Change0%
Market Cap61.52B
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
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%
ROICexcg growth 3Y-2.41%
ROICexcg 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%