VMware (VMW) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

VMware (VMW) closed at $157.71 in the latest trading session, marking a +0.9% move from the prior day. This move outpaced the S&P 500's daily gain of 0.07%. Elsewhere, the Dow lost 0.25%, while the tech-heavy Nasdaq added 0.14%.

Heading into today, shares of the cloud computing company had gained 4.98% over the past month, lagging the Computer and Technology sector's gain of 7.83% and the S&P 500's gain of 6.28% in that time.

Wall Street will be looking for positivity from VMW as it approaches its next earnings report date. In that report, analysts expect VMW to post earnings of $1.87 per share. This would mark year-over-year growth of 11.31%. Our most recent consensus estimate is calling for quarterly revenue of $2.50 billion, up 8.31% from the year-ago period.

Investors should also note any recent changes to analyst estimates for VMW. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% lower. VMW is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, VMW currently has a Forward P/E ratio of 23.6. This represents a discount compared to its industry's average Forward P/E of 27.71.

Investors should also note that VMW has a PEG ratio of 1.76 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. VMW's industry had an average PEG ratio of 2.08 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 47, putting it in the top 19% 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.

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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