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VMware Inc VMW

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

VMware Announces Current COO Raghuram as CEO, Posts Strong Preliminary Q1 Results; Maintain $202 FVE

Mark Cash Senior Equity Analyst

Analyst Note

| Mark Cash |

We are maintaining our $202 fair value estimate for narrow-moat VMware after the company announced that current COO Raghu Raghuram will become CEO and also released strong first-quarter preliminary results. Our expectation was for one of VMware’s two current COOs to become CEO, and we positively view the company tapping its leadership bench, given the moving pieces in the organization. VMware has various sizable franchises pivoting their offerings, is shifting toward subscriptions amid tight integration with cloud partners, and is being spun off from Dell toward the end of 2021.

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Company Profile

Business Description

VMware, a majority-owned subsidiary of Dell, is an industry leader in virtual machines for data center servers and computer desktops. The software provider operates in the three segments of licenses, maintenance, and professional services. Customers include enterprises utilizing data centers, end-user computing, cloud providers, and software-defined networking. The Palo Alto, California, firm operates and sells on a global scale, with about half its revenue from the United States, through direct sales, distributors, and partnerships.

Contact
3401 Hillview Avenue
Palo Alto, CA, 94304
T +1 650 427-5000
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Jan 31, 2021
Fiscal Year End Jan 29, 2022
Stock Type Aggressive Growth
Employees 34,000

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