Activist investor Elliot Management recently called for EMC to spin off VMware (VMW - Get Report), and shareholders will make out well no matter what the company decides according to the report. Spinning off VMware could results in a $17 billion valuation for EMC, while keeping the company leaves EMC well-positioned to raise debt to finance buybacks according to Barron's.
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- Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 4.7%. 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.
- Although EMC's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.11, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for EMC CORP/MA is rather high; currently it is at 69.98%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, EMC's net profit margin of 10.00% significantly trails the industry average.
- Net operating cash flow has slightly increased to $1,254.00 million or 2.10% when compared to the same quarter last year. Despite an increase in cash flow, EMC CORP/MA's cash flow growth rate is still lower than the industry average growth rate of 33.85%.
- EMC CORP/MA's earnings per share declined by 12.5% 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, EMC CORP/MA increased its bottom line by earning $1.33 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($1.91 versus $1.33).
- You can view the full analysis from the report here: EMC Ratings Report