Factors that boosted VMware’s stock
Earlier in the series, we discussed analysts’ expectations for VMware’s (VMW) soon-to-be-announced fiscal 1Q17 results. We also discussed its recent buyout of Wavefront and the sale of its vCloud Air to France-based OVH.
The above chart, taken from RightScale’s 2017 State of the Cloud Report, shows that VMware’s vSphere is the preferred private cloud software among both enterprises and small and medium businesses (or SMB).
VMware’s increased initiatives and strategic partnerships have enabled its stock price to recover after hitting a low in 2016. It’s surged more than 77% in the past year.
Another important factor that contributed to VMware’s stock surge was the removal of the uncertainty that had been plaguing it since Dell announced its purchase of EMC. EMC has an 80.0% stake and 97.0% voting rights in VMware.
VMware’s improved price targets
Earlier this year, according to 247wallst.com, VMware was chosen as one of RBC’s top large-cap software picks for 2017. The company’s better-than-expected fiscal 4Q16 results and increased initiatives in the cloud space also caused Drexel Hamilton analyst Brian White to reiterate a “buy” rating on the stock, raising its price target to $105 from $90.
Similarly, John DiFucci, an analyst at Jefferies, reiterated a “buy” rating on VMware stock, raising its price target to $105 from $91.