Buying VMware Inc. (VMW) Stock Is A Smart Move Today?

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VMware Inc. (NYSE:VMW) finished Friday with an addition of $0.75 to close at $122.76, an upside of 0.61 percent. An average of 591,680 shares of common stock have been traded in the last five days. There was a gain of $1.27 in the past week, and it reached a new high 17 times over the past 12 months. The last 20 days have seen an average of 919,475 shares traded, while the 50-day average volume stands at 975,354.

VMW stock has increased by 1.05% in the last month. The company shares reached their 1-month lowest point of $117.84 on 12/07/22. With the stock rallying to its 52-week high on 02/10/22, shares of the company touched a low of $91.53 and a high of $136.85 in 52 weeks. It has reached a new high 16 times so far this year and achieved 5.94% or $6.88 in price. In spite of this, the price is down -10.30% from the 52-week high.


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Insider Transactions

VMW stock investors should be aware that VMware Inc. (VMW) stock had its last reported insider trading activity 9 days ago on Dec 22. In this transaction, the insider spent $804,838. Chief Financial Officer & EVP, Rowe Zane, disposed of 17,860 shares at a price of $120.02 on Dec 02. The insider now owns more than $2,143,608 worth of shares. Prior to that, EVP, Worldwide Sales Brulard Jean Pierre went on to Sale 359 shares at $111.05 each on Sep 22. An amount of $39,867 was transacted.

Valuation Metrics

VMware Inc. (VMW) has a trailing price-to-earnings (P/E) ratio of 37.00. The stock’s beta is 0.67. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.97, the price-to-book (PB) ratio at 64.61, and the price-to-cash flow ratio at 15.58.

Financial Health

The quick ratio of VMware Inc. for the three months ended October 30 was 0.70, and the current ratio was 0.70, indicating that the company is not able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 12.06 and a total debt to equity ratio of 13.31 for the quarter ending October 30. Its gross profit as reported stood at $10.58 billion compared to revenue of $12.85 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, VMware Inc.’s return on assets was 5.00%.

Earnings Surprise

For the three-month period that ended October 30, VMware Inc. had $9.69 billion in total debt. In the quarter under review, the net income was down than the previous quarter. The company posted a net income of $231.0 million in the quarter, while revenues were shrunk -77.92%. The analyst consensus anticipated VMware Inc.’s latest quarter earnings to come in at $1.58 per share, but it turned out to be $1.47, a -7.00% surprise. For the quarter, EBITDA amounted to $706.0 million. Shareholders own equity worth $425.43 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at VMware Inc. (VMW) price momentum. RSI 9-day as of the close on 30 December was 60.81%, suggesting the stock is Neutral, with historical volatility in this time frame at 12.28%.

As of today, VMW’s price is $121.54 +1.05% or $1.27 from its 5-day moving average. VMW is currently trading +0.89% higher than its 20-day SMA and +5.32% higher than its 100-day SMA. However, the stock’s current price level is +13.95% above the SMA50 and +8.64% above the SMA200.

The stochastic %K and %D were 38.28% and 37.40%, respectively, and the average true range (ATR) was 1.77. With the 14-day stochastic at 51.40% and the average true range at 1.83, the RSI (14) stands at 60.23%. The stock has reached 0.26 on the 9-day MACD Oscillator while the 14-day reading was at -0.36.

Analyst Ratings

UBS reiterated its a Neutral rating on VMware Inc. (NYSE: VMW), but raised their price target to $125, indicating a potential price increase of 1.79% for the stock. The consensus rating for VMware Inc. (VMW) among analysts is Hold. According to current brokerage recommendations, 0 brokerage firms advise that investors sell VMW, while 8 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 1 others rate it as a “buy”.

What is VMW’s price target for the next 12 months?

Analysts predict a range of price targets between $131.00 and $142.50, with a median target of $139.25. Taking a look at these predictions, the average price target given by analysts for VMware Inc. (VMW) stock is $138.25.

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