NEW YORK (TheStreet) -- Shares of VMware (VMW) - Get VMware, Inc. Class A Report gained 2.1% to close at $79.15 on Monday, after the software virtualization company's CEO Pat Gelsinger said the company isn't interested in acquiring its parent company EMC (EMC) .

Gelsinger told Network World that the current "Federation structure" is the best option for customers of VMware and EMC, the companies themselves, and their employees. "Being bigger and more strategic as a whole is a more powerful position for the companies," the CEO said.

Investor group Elliott Management has urged EMC to spin off VMware since taking a stake in the computer storage company, though the activist investor would reportedly support a downstream merger wherein VMware would acquire EMC. Earlier this year the activist investor reached a standstill agreement with EMC, which will end on Tuesday.

About 3.8 million shares of VMware were traded in regular trading hours Monday, above the company's average trading volume of about 1.5 million shares a day.

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Separately, TheStreet Ratings team rates VMWARE INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate VMWARE INC (VMW) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 11.6%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • VMW's debt-to-equity ratio is very low at 0.21 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 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for VMWARE INC is currently very high, coming in at 89.54%. Regardless of VMW's high profit margin, it has managed to decrease from the same period last year.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market on the basis of return on equity, VMWARE INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Net operating cash flow has decreased to $316.00 million or 22.73% when compared to the same quarter last year. Despite a decrease in cash flow of 22.73%, VMWARE INC is in line with the industry average cash flow growth rate of -28.94%.
  • You can view the full analysis from the report here: VMW Ratings Report