Analyst Note| Abhinav Davuluri, CFA |
VMware reported second-quarter results relatively consistent with our expectations. The firm did not have an earnings call or provide guidance due to the pending deal for VMware to be acquired by Broadcom for $61 billion. We are maintaining our $147 fair value estimate for narrow-moat VMware, which is probability weighted. We assign a 75% probability of the deal being completed at Broadcom's offer price of $138.23 per share, which consists of 50% received as $142.50 cash and 50% received as 0.2520 shares of Broadcom per VMware share. Our stand-alone fair value estimate remains $175 per share.