Vmware Inc (VMW) Fundamental Analysis & Valuation

NYSE:VMW • US9285634021

142.48 USD
-7.43 (-4.96%)
At close: Nov 21, 2023
143 USD
+0.52 (+0.36%)
Pre-Market: 11/22/2023, 7:28:31 AM
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This VMW fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

Fundamental Rating

5

Taking everything into account, VMW scores 5 out of 10 in our fundamental rating. VMW was compared to 276 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.


Dividend Valuation Growth Profitability Health

8

1. VMW Profitability Analysis

1.1 Basic Checks

  • In the past year VMW was profitable.
  • VMW had a positive operating cash flow in the past year.
  • In the past 5 years VMW has always been profitable.
  • VMW had a positive operating cash flow in each of the past 5 years.
VMW Yearly Net Income VS EBIT VS OCF VS FCFVMW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B

1.2 Ratios

  • The Return On Assets of VMW (4.43%) is better than 82.92% of its industry peers.
  • VMW has a Return On Equity of 55.99%. This is amongst the best in the industry. VMW outperforms 97.86% of its industry peers.
  • VMW's Return On Invested Capital of 7.86% is amongst the best of the industry. VMW outperforms 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 10.80%.
Industry RankSector 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%
VMW Yearly ROA, ROE, ROICVMW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 0 100 -100 200 -200

1.3 Margins

  • With an excellent Profit Margin value of 10.48%, VMW belongs to the best of the industry, outperforming 84.70% of the companies in the same industry.
  • In the last couple of years the Profit Margin of VMW has grown nicely.
  • VMW's Operating Margin of 14.00% is amongst the best of the industry. VMW outperforms 84.70% of its industry peers.
  • In the last couple of years the Operating Margin of VMW has declined.
  • VMW's Gross Margin of 81.19% is amongst the best of the industry. VMW outperforms 86.83% of its industry peers.
  • VMW's Gross Margin has been stable in the last couple of years.
Industry RankSector 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%
VMW Yearly Profit, Operating, Gross MarginsVMW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 0 20 40 60 80

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ROAROEROICOperating and Profit MarginShow most profitable peers

3

2. VMW Health Analysis

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VMW is destroying value.
  • Compared to 1 year ago, VMW has more shares outstanding
  • Compared to 1 year ago, VMW has an improved debt to assets ratio.
VMW Yearly Shares OutstandingVMW Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M
VMW Yearly Total Debt VS Total AssetsVMW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B

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.
  • VMW has a Altman-Z score (1.85) which is comparable to the rest of the 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.
  • VMW has a better Debt to FCF ratio (2.25) than 73.67% of its industry peers.
  • A Debt/Equity ratio of 3.73 is on the high side and indicates that VMW has dependencies on debt financing.
  • With a Debt to Equity ratio value of 3.73, VMW is not doing good in the industry: 87.19% of the companies in the same industry are doing better.
  • 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 RankSector Rank
Debt/Equity 3.73
Debt/FCF 2.25
Altman-Z 1.85
ROIC/WACC0.77
WACC10.18%
VMW Yearly LT Debt VS Equity VS FCFVMW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B 8B 10B

2.3 Liquidity

  • A Current Ratio of 0.87 indicates that VMW may have some problems paying 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.
  • The Quick ratio of VMW (0.87) is worse than 81.49% of its industry peers.
Industry RankSector Rank
Current Ratio 0.87
Quick Ratio 0.87
VMW Yearly Current Assets VS Current LiabilitesVMW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B 10B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. VMW Growth Analysis

3.1 Past

  • VMW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.90%.
  • Measured over the past 5 years, VMW shows a small growth in Earnings Per Share. The EPS has been growing by 4.63% on average per year.
  • VMW shows a small growth in Revenue. In the last year, the Revenue has grown by 3.56%.
  • The Revenue has been growing by 11.17% on average over the past years. This is quite good.
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

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
VMW Yearly Revenue VS EstimatesVMW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5B 10B 15B 20B 25B
VMW Yearly EPS VS EstimatesVMW Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5 10 15

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Find the best growth stocksShow best growing peers

6

4. VMW Valuation Analysis

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 20.59, which indicates a rather expensive current valuation of VMW.
  • 85.77% of the companies in the same industry are more expensive than VMW, based on the Price/Earnings ratio.
  • The average S&P500 Price/Earnings ratio is at 27.03. VMW is valued slightly cheaper when compared to this.
  • VMW is valuated rather expensively with a Price/Forward Earnings ratio of 17.40.
  • Based on the Price/Forward Earnings ratio, VMW is valued cheaply inside the industry as 85.41% of the companies are valued more expensively.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 25.11, VMW is valued a bit cheaper.
Industry RankSector Rank
PE 20.59
Fwd PE 17.4
VMW Price Earnings VS Forward Price EarningsVMW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, VMW is valued cheaply inside the industry as 85.41% of the companies are valued more expensively.
  • 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 RankSector Rank
P/FCF 13.2
EV/EBITDA 20.29
VMW Per share dataVMW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 -10 20 30

4.3 Compensation for Growth

  • The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
  • 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%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

0

5. VMW Dividend Analysis

5.1 Amount

  • VMW does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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Find the best dividend stocksShow peers with best dividend

VMW Fundamentals: All Metrics, Ratios and Statistics

Vmware Inc

NYSE:VMW (11/21/2023, 8:04:00 PM)

Premarket: 143 +0.52 (+0.36%)

142.48

-7.43 (-4.96%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)11-30
Earnings (Next)02-29
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 RankSector 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 RankSector 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 RankSector 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 RankSector 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.