Caris & Co.'s analyst, Shebly Seyrafi, maintained an Above Average rating on VMW but raised the target price from $60 up to $90 based on VMware's leadership position in the virtualization segment.
Shares reached as high as $80.65 today but then took a bumpy road down for most of the afternoon. A rally took off at 3:32pm as VMW hit a day low of $77.06. With 3 block trades totaling 47,000 shares helped the price climb to close at $78.30. Lower by $0.14 from the open but a full $1.65 up from the prior day close.
Looking at the 1 month line or candlestick chart a clear upward, bullish trend emerges.
At VMworld, XenSource unveiled their embedded hypervisor distribution channel. It was over-shadowed by VMware's overwhelming OEM support from IBM, HP, Dell, and others.
On a separate note, folks are still talking about P/E valuation as the main reason to short the stock. Please remember that if VMware meets or beats analyst estimates for 2007 and 2008 then the P/E will only be in the 80-120 range at today's market value. In addition, a 2 for 1 stock split would also change the P/E ratio. Look at revenue growth, look at earnings growth, and the 75%+ market penetration. These are strengths that can not be ignored.
Bought on August 14th and still have a bullish outlook!
Hate to burst your bubble but P/E is price/earnings per share. A 2/1 stock split doubles the shares outstanding, thereby halving the earnings per share number. VMW's p/e won't be affected by any split.