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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Vmware, Inc. (XNYS:VMW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VMW
Name:
VMWARE, INC. (XNYS:VMW)
Sector:
1.20B
Industry:
Software�Infrastructure
CEO:
Mr. Patrick Gelsinger
Total Employees:
37,500
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -986.62% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VMWARE, INC.(VMW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
115.66
One Month Price Target:
$116.09
Six Month Price Target :
$118.26
Likely Price in One Year's Time:
Ticker:
$120.86
Likely Trading Range Today Under (Normal Volatility)
$115.17
Price Upper limit ($) :
$116.13
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$109.89
This week:
$102.75
This month :
$89.84
Other Primary facts
Market Cap:
48.44B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
423.02M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.78%
-11.53%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$142.48
$130.31
$88.84
$101.01
Medium risk (<10%) entry points
Buy Call
Sell Call
$126.35
Buy Put:
Sell Put:
$123.76
$104.93
$107.56
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VMW
Sharpe Ratio:
-0.76%
Comparison:
VMW, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -146.75% lower than the industry
& is -133.54% lower than the market/S&P 500 average
Average Returns/Yield of
VMW
Daily returns:
-0.01%
Weekly returns:
-0.05%
Monthly returns:
-0.19%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is -116.18% below industry average
Classification:
VMW, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.71
Statistical test of Returns:
VMW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.43%
Weekly Volatility:
5.43%
Monthly Volatility:
10.85%
Yearly Volatility:
37.59%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.90%
Volatility in last five trading days has been -62.82% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.99%
Weekly VaR:
-11.16%
Monthly VaR:
-22.33%
How Much Can the price of
VMW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-77.35%
This translates to price declining to:
$92.69
This translates to price declining to:
$26.20
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
VMW is a 57.59% riskier investment compared to the market/S&P 500 & is 35.01% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -27.18% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VMW
Beta in relation to market/S&P 500--0.67
Expected beta in 1 year's time:
0.565
Expected beta in 3 year's time:
0.799
Unlevered (debt free) Beta:
0.437
Beta in relation to Nasdaq (XNAS):
0.752
Beta in relation to all global stocks::
0.679
Beta Comparison & Analysis
Beta of competitors/peers::
1.245
Beta is -46.22% lower than peers
Average Industry Beta:
1.112
Beta is -39.77% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.101
Alpha is -378.19% below industry average alpha yield
Alpha is -641% below the market average
Analysis of Cost of Capital of
VMW
Equity cost of capital:
0.077
Equity cost of capital is -28.13% below industry mean WACC
Unlevered (without debt) cost of capital:
5.05%
Before-tax cost of debt:
-3.08%
After-tax cost of debt:
-2.43%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
-2.43%
WACC is -24.87% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$22.72
Revenue growth rate per share of (3Y):
5.18
Annual revenue growth rate is -39.80% below industry average
EPS:
$3.87
Expected Annual growth rate of EPS (3Y):
-10.14%
Expected future EPS growth rate is -133.66% lower than the Software�Infrastructure industry
Free cash flow (FCF) per share:
$8,390.66
-
-
Debt per share
$13.90
EBITDA per share
$8.58
Valuation Analysis Today of
VMW
P/E Ratio:
31.1
P/E Ratio of Competitors/Peers:
51.71
P/E ratio is -39.87% lower than main peers & is -52.33% lower than the industry
Stock price/value with industry average P/E ratio: $252.46
VMW is -54.19% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
5.09
Price to sales ratio is -53.66% below the industry mean
P/B (Price to book value ratio):
5.18
Price to free cash flow: 0.01
Price to free cash flow ratio is -76.19% lower than the industry
Net income growth rate (3Y):
249.78%
Net income growth rate is -97.06% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 23.69%
Previous Dividend: $27.40
Previous adjusted dividend: $27.40
Previous Dividend: $27.40
-
-
Average dividend payment (long-term): $27.40
-
Expected next dividend payment date: 31/01/2022
Expected next dividend record date: 27/01/2022
Expected next dividend declaration date: 25/01/2022
Previous dividend payment date: 11/01/2021
Previous dividend record date: 29/10/2021
Previous dividend declaration date: 27/10/2021
Dividend History:
2021-11-02--$27.40
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
62.20%
Net debt to equity ratio:
3.03%
Debt to assets ratio:
20.41%
Net debt to assets ratio:
0.99%
Debt-to-asset ratio is -70.73% below industry average
Ability to repay debt:
Interest coverage ratio:
-20.06
Interest coverage ratio is -90.50% less than industry average
Looking forward:
Debt growth rate:
-9.49%
Annual debt growth is -109% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.02%
Analysis of Key Statistics
Correlation of price movement with the market:
0.589
Statistical significance of correlation:
VMW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is 22.78% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
-0.011
Covariance of price movement with the market:
-0.016
Kurtosis
18.413
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.131
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
VMW
Gross Profit Margin Ratio:
-277%
Operating Profit Margin Ratio:
23.26%
Operating profit margin is -295.98% lower than the industry
Net Profit Margin Ratio:
-277%
Effective Tax Rate:
14.55%
Effective tax rate is -53.57% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
21.81%
Return on equity (ROE) is -79.57% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.16%
Return on assets (ROA) is -288.99% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.09
Current ratio is -53.26% below industry average
Cash Conversion Cycle (days):
68.5
Cash conversion cycle is -39.18% below industry average
The remaining useful life of property plant & equipment is: 5.0 years
Stock based compensation to net income ratio:
12.75%
In-depth Efficiency Analysis
Revenue generated per employee:
256.3K
Each employee generates -35% less revenue than industry average revenue per employee
EBITDA generated per employee:
96.8K
Each employee generates 48% more EBITDA than industry average revenue per employee
Profit generated per employee:
55.0K
Each employee generates 163% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
31.9K
Each employee generates 61% more free cash flow than industry average revenue per employee
Assets/Capital per employee
540.7K
Each employee generates 61% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 11.66%
Growth rate in R&D investment/expenditure is -549.56% lower than the industry
Competitors/Peer firms of
VMW
TE Connectivity Ltd (XNYS:TEL)
PALO ALTO NETWORKS, INC. (XNAS:PANW)
AMPHENOL CORPORATION (XNYS:APH)
SUNSTONE METALS LTD (XASX:STM)
DELL TECHNOLOGIES INC. (XNYS:DELL)
MOTOROLA SOLUTIONS, INC. (XNYS:MSI)
HP INC. (XNYS:HPQ)
ARISTA NETWORKS, INC. (XNYS:ANET)
BLOCK, INC. (XNYS:SQ)
Current Analyst Ratings
Strong buy�38%
Buy�54%
Hold�58%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/29/22
Revenue:
9.61B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.76B
6.85B
3.83B
1.32B
6.44B
5.12B
-
10.27B
-
- 181000.00K
1.40B
3.63B
2.24B
2.06B
2.41B
351.00M
2.06B
Statement of Cash Flow
Date:
Period:
269.00M
Differed Income Tax :
- 48000.00K
Stock Based Compensation :
263.00M
Change in Working Capital :
320.00M
Accounts Receivables:
395.00M
Other Working Capital:
571.00M
Other Non-Cash Items:
37.00M
Net Cash Provided by Operating Activities:
1.27B
Investments in PP&E:
- 70000.00K
Net Acquisitions:
- 10000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2022
Q1
5.59B
120.00M
5.71B
2.29B
-
537.00M
8.54B
1.34B
9.60B
926.00M
-
5.82B
2.59B
20.28B
-
28.81B
205.00M
-
-
5.83B
1.81B
7.85B
5.88B
1.26B
11.51B
-
19.36B
4.00M
7.49B
- 3000.0K
1.96B
April 30, 2021 at 6:00:00 AM
13.03B
9.45B
28.81B
-
5.88B
286.0M
8.00M
-
- 72000.00K
- 1000.00K
131.00M
- 427000.00K
-
-
- 297000.00K
-
897.00M
5.67B
4.77B
1.27B
- 70000.00K
1.20B
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
VMW
2023
2024
2025
2026
2027
$147.53
$154.17
$161.11
$168.36
$175.93