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Analysts Hail VMware's Strong License Driven Q2; Await Broadcom Transaction Approval

·2 min read
  • VMware, Inc (NYSE: VMWclocked 6% revenue growth in Q2 to $3.34 billion above the consensus. Non-GAAP EPS of $1.64 beat the Street view.

  • Raymond James analyst Simon Leopold maintained Market Perform on VMware following 2Q23's better-than-expected earnings report.

  • Given the pending acquisition by Broadcom Inc (NASDAQ: AVGO) that will likely close in October 2023, the company did not host a conference call, nor did it offer a forecast, he noted.

  • KeyBanc analyst Thomas Blakey reiterated Sector Weight following the Q2 beat, reaffirming his view that VMware is a strategic fit for Broadcom.

  • The analyst updated his model for Q2, and his forecasts remain largely unchanged.

  • He notes VMware did not host a conference call nor provide guidance in its financial disclosures for Q2.

  • Mizuho analyst Gregg Moskowitz reiterated a Neutral and $138 price target.

  • VMW reported partial Q2 results that were better than expected.

  • Total revenue growth of 6% Y/Y exceeded his and Street forecasts by 1 point.

  • Moreover, total billings were surprisingly strong, growing 13% Y/Y, easily beating his +4% estimate and the Street's +5% forecast.

  • He has for several years expressed much caution on VMW given his concerns about its on-premise exposure, growth profile, and ability to execute consistently.

  • Nevertheless, he believes AVGO is opportunistically acquiring a depressed asset at a very reasonable valuation.

  • Price Action: VMW shares traded lower by 1.40% at $120.00 on the last check Friday.

Latest Ratings for VMW

Date

Firm

Action

From

To

Feb 2022

Credit Suisse

Maintains

Outperform

Feb 2022

Mizuho

Maintains

Neutral

Feb 2022

Oppenheimer

Maintains

Outperform

View More Analyst Ratings for VMW

View the Latest Analyst Ratings

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