Wall Street analysts on VMware stock
In this series, we’ve examined VMware’s (VMW) new product launch, segment-wise performances, and overall performance in fiscal 2Q18.
We also compared VMware’s technical indicators to those of its peers—Microsoft (MSFT), Citrix Systems (CTXS), and Red Hat (RHT)—in the IT virtualization space. We also discussed selected aspects of VMware’s value proposition in the US software industry.
As the graph above shows, of the 34 analysts covering VMware, 62% gave it a “buy” recommendation on August 29, 2017, and 38% gave it a “hold” recommendation. There are no “sell” recommendations on the stock.
VMware’s price performance
VMware’s stock price movements during the past month have been positive. The stock has fallen ~13.4% as of August 29, 2017. However, in the past year, VMware has returned ~41.0% to its shareholders.
We also discussed the factors that provided a boost to VMware stock. The consensus target price for VMware stock by Wall Street analysts is $111.76 per share. The stock’s median target price was $112.00 on August 29, 2017, and it was trading at $104.68 per share on that day.
Although becoming a part of Dell initially looked positive for VMware’s prospects, this view may not hold up after looking at the debt that VMware must raise to meet Dell’s requirements. Commenting on VMware’s fiscal 2Q18 results, Edward Parker, an analyst with BTIG, noted that VMware is “clearly executing well, navigating the initial chapters of the Dell deal nicely, showing promising momentum in new product categories and again modestly taking up forecasts.”
Investors seeking diversified exposure to the software space can consider the PowerShares QQQ Trust, Series 1 ETF (QQQ), which invests ~27% of its holdings in application software stocks.