Market News

VMware Reports Quarterly Beat; Shares Fall 5.9%

VMware, Inc. (VMW) reported stronger-than-expected Q2 results for Fiscal 2022, topping both earnings and revenue estimates driven by robust growth in bookings across all major categories.

However, shares of the cloud computing and virtualization technology company fell 5.9% in Thursday’s extended trading session.

Notably, VMware is currently owned by Dell Technologies (DELL) and is slated to complete its announced spin-off in early November. (See VMware stock charts on TipRanks)

The company reported adjusted earnings of $1.75 per share, beating analysts’ expectations of $1.64 per share. However, EPS was down 3% year-over-year compared to $1.81 per share reported in the prior-year period.

On the positive side, revenues jumped 9% year-over-year to $3.14 billion and exceeded consensus estimates of $3.1 billion.

The increase in revenues reflected a surge in combined subscription, SaaS, and license revenue, which increased 12% to $1.51 billion.

VMware CEO Raghu Raghuram commented, “We are delivering the multi-cloud platform for all applications, enabling the digital innovation and enterprise control that our customers need to accelerate their businesses today and in the future.”

Ahead of the earnings results, Monness analyst Brian White reiterated a Hold rating on the stock.

Consensus among analysts is a Moderate Buy based on 5 Buys and 7 Holds. The average VMware price target of $173.27 implies 9.1% upside potential to current levels.

VMW scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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