What Analysts See in VMware After Earnings

By Chris Lange Updated Jan 13, 5:32AM EST · Published Jul 20, 7:55AM EDT

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What Analysts See in VMware After Earnings — © Thinkstock

VMware Inc. (NYSE: VMW) released its second-quarter earnings report after the markets closed on Monday. Overall, this was a fairly positive quarter for VMware. The company built up its balance sheet, while looking to return over $1 billion to shareholders in its recently announced repurchase plan. Both analysts and investors alike were pleased with the results as the stock gained nearly 10% on Tuesday.

24/7 Wall St. has included some key highlights from the earnings report, as well as what analysts were saying after the fact.

The company said that it had $0.97 in earnings per share (EPS) on $1.69 billion in revenue. Consensus estimates from Thomson Reuters had called for $0.95 in EPS on revenue of $1.68 billion. In the same period of last year, VMware posted EPS of $0.93 and $1.59 billion in revenue.

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Licensing revenues totaled $644 million and Service revenues topped out at $1.05 billion for the quarter. Each category increased from the previous year, when VMware had Licensing revenues of $638 million and Service revenues of $959 million.

Last month, the company made announcements that it would further innovate its Business Mobility strategy and product offerings. VMware plans to have a new endpoint security solution powered by Tanium called VMware TrustPoint, which will deliver an integrated solution for unified endpoint management and security.

Previously, VMware announced that it will return about $1.2 billion to shareholders via its repurchase plan. Keep in mind that the company has a market cap of roughly $29 billion, making this repurchase plan about 4% of the total cap.

A few analysts weighed in on VMware following the earnings report:

Bernstein has a Market Perform rating and raised its price target to $67 from $58.
BMO has a Market Perform rating and raised its price target to $70 from $55.
Cowen raised a price target to $68 from $61.
Deutsche Bank has a Hold rating and raised its price target to $65 from $55.
Jefferies raised its price target to $84 from $83.
Maxim has a Hold rating and raised its price target to $73 from $68.
Mizuho raised its price target to $61 from $52.
Nomura maintained its price target at $60.
SunTrust Robinson raised its price target to $64 from $58.
UBS raised its price target to $77 from $72.

Shares of VMware closed Tuesday up about 9% at $68.23, with a consensus analyst price target of $61.90 and a 52-week trading range of $43.25 to $93.43.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.