VMWare Inc. Stock Buy Recommendation Reiterated (VMW)
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- The revenue growth came in higher than the industry average of 1.5%. Since the same quarter one year prior, revenues rose by 12.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- VMW's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, VMW has a quick ratio of 2.02, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $676.42 million or 17.31% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.57%.
- VMWARE INC's earnings per share declined by 9.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VMWARE INC increased its bottom line by earning $1.71 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($3.29 versus $1.71).
- The gross profit margin for VMWARE INC is currently very high, coming in at 84.70%. Regardless of VMW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VMW's net profit margin of 14.56% is significantly lower than the industry average.
--Written by a member of TheStreet Ratings Staff. Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.
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