Why VMware Stock Rose Last Month
VMware’s stock rise in August
Hardware technology (QQQ) stock VMware (VMW) rose 16.6% in August 2017 and closed the month at $108.1. VMware is now trading 50% above its 52-week low of $71.81 and marginally below its 52-week high of $108.33.
Of the 34 analysts covering VMware, 21 have issued a “buy” recommendation on the stock, and 13 recommend a “hold.” Analysts have a 12-month average price target $112.02 for VMware and a median target of $112. VMware is trading at a discount of 3.6% to median analyst estimates.
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VMware announced its fiscal 2Q18 results on August 24, 2017, reporting revenues of $1.9 billion with non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $1.19. VMware beat the analysts’ revenue estimate by $20 million and earnings by $0.04 per share, and the stock has risen ~8% since its fiscal 2Q18 earnings announcement. Its revenue rose 12.4%, while its EPS rose 15% in fiscal 2Q18.
VMware’s revenue expectation
For fiscal 3Q18 (ended October 2017), VMware expects revenues between $1.93 billion and $1.98 billion, with non-GAAP EPS between $1.25 and $1.28. Analysts expect the firm to post revenues of $1.96 billion, with EPS of $1.27 in fiscal 3Q18. In fiscal 3Q17, VMware reported EPS of $1.14.
VMware has beaten its EPS estimate for the past four quarters. The firm beat its EPS estimate by 3.5% in fiscal 2Q18, by 4.2% in fiscal 1Q18, by 2.1% in fiscal 4Q17, and by 3.6% in fiscal 3Q17, reporting EPS of $1.19, $0.99, $1.43 and $1.14, respectively, during those quarters.