VMware (VMW) Stock Surging After Q2 Earnings Beat
NEW YORK (TheStreet) -- Shares of VMware (VMW) - Get Report are surging by 9.17% to $68.31 on Tuesday morning, after the Palo Alto-based cloud and virtualization company posted better-than-expected results for the 2016 second quarter.
VMware reported adjusted earnings for the second quarter of 97 cents per share, up from analysts' estimates of 95 cents per share after yesterday's closing bell.
Sales spiked 11% from 2015 to $1.69 billion, surpassing analysts predictions of $1.67 billion.
"Q2 was a continuation of the good start to the year we experienced in Q1, both for results and against our strategic goal of building momentum for our newer growth businesses and in the cloud," said Pat Gelsinger, the company's CEO.
Additionally, the company received a price target hike by MKM Partners to $80 from $70 on Tuesday. The firm reiterated its "buy" rating on the Palo Alto-based cloud and virtualization software company.
MKM is expecting the stock to continue improving as the company has demonstrated plans for new products beyond server virtualization, such as Tanium, a new endpoint security service. Last month, VMware purchased Arkin Net, a move that the company said they hope will advance their software-defined data centers.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate VMWARE INC as a Buy with a ratings score of B-. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: VMW
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