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VMware Inc Class A VMW Stock Quote

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Morningstar‘s Stock Analysis VMW

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VMware Reports Sound Third Quarter; No Change to $147 Fair Value Estimate

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

VMware reported fiscal 2023 third-quarter results in line with our expectations. The firm did not host an earnings call or provide guidance due to its pending $61 billion acquisition by Broadcom, which is expected to close by the end of January 2023. We are maintaining our probability-weighted $147 fair value estimate for narrow-moat VMware. 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 share of Broadcom per VMware share. Our stand-alone fair value estimate remains at $175 per share.

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Key Statistics VMW

Company Profile VMW

Business Description

VMware is an industry titan in virtualizing IT infrastructure and became a stand-alone entity after spinning off from Dell Technologies in November 2021. The software provider operates in the three segments: licenses; subscriptions and software as a service; and services. VMware’s solutions are used across IT infrastructure, application development, and cybersecurity teams, and the company takes a neutral approach to being the cohesion between cloud environments. The Palo Alto, California, firm operates and sells on a global scale, with about half its revenue from the United States, through direct sales, distributors, and partnerships.

3401 Hillview Avenue
Palo Alto, CA, 94304
T +1 650 427-5000
Industry Software - Infrastructure
Most Recent Earnings Oct 31, 2022
Fiscal Year End Jan 28, 2023
Employees 37,500

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