Pretty simple... VMW says lowered guidance on customers delaying ELA's and purchase due to economic slowdown. The street is smart enough to not buy into that BS answer. Do you really think IT mgrs would delay purchase of a product that ensures quick ROI, and lowered TCO with power, floorspace and server savings? This is a no-brainer and even more magnified in an economic slowdown. Customers are simply waiting to kick the tires on Microsoft's Hyper-V, plain and simple...
Let me guess, you're a techie and you know the product but you don't know much about stocks?
The answer is that even though the company is growing, the growth rate is nowhere near enough to support the outrageously inflated valuation that the stock used to have, so the price is crashing down to something more appropriate (it's not quite there yet, but it's getting there).
Take a look at this post, which refers to an argument I had back in January in which I tried in vain to explain to a couple of techies why the stock isn't worth more and more and more just because the company has a great product and is going to grow, if the stock is already overvalued:
you know nothing about techs that's the problem with stock trading.
VMW products cannot be replaced not by MSFT or Citrix. VMW will lead into the next tech era. Believe me or not, virtualization will change the way we compute in year 2010 and beyond.
VMW by $200 in 2010
mark my words!!
Read the numbers again "VMware also said it expects its full-year sales to rise between 42% and 45% from the $1.33 billion in reported in 2007. "
i don't see 30% do you? ANyway, tomorow will tell. They already told us the earnings will be light for the rest of 2008.Heck, even goog missed.
how bad is outlook????
# 2008 revenues are targeted to grow approximately 42% to 45% compared to 2007.
# Third quarter 2008 revenues are targeted to be within a range of approximately $462 to $468 million.