NEW YORK (TheStreet) -- Shares of VMware (VMW) - Get VMware, Inc. Class A Report are plunging, down 5.19% to $76.43 in late morning trading Wednesday, after the information technology company was downgraded to "hold" from "buy" by analysts at Needham this morning.
The firm lowered its rating following VMware's fourth quarter earnings results and a disappointing calendar year 2015 outlook.
Analysts at the firm noted they are concerned about CY15 revenue guidance. The company now expects growth of between 10% to 12% year over year, down from its prior forecast of "mid teens" in August.
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For the fourth quarter, the company posted adjusted earnings of $1.08 per share, higher than the $1.01 per share from the year-ago period, and edging out the $1.07 per share analysts' estimates.
Revenue grew 15% year over year to $1.7 billion for the fourth quarter, up from the $1.48 billion in the same quarter of last year, and higher than the $1.69 billion consensus estimate.
Also, VMware announced that it will purchase up to $1 billion of its Class A common stock through the end of 2017, in addition to its ongoing $1 billion buyback plan announced in August 2014.
Palo Alto, CA-based VMware is a provider of virtualization infrastructure solutions utilized by organizations to help transform the way they build, deliver and consume information technology resources.
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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity."
- You can view the full analysis from the report here: VMW Ratings Report