Story updated at 9:50 a.m. to reflect market activity.
VMWare fell -0.8% to $94.45 in morning trading.
The software company will struggle to meet consensus expectations in the upcoming quarters according to Wells Fargo analysts Jason Maynard, Karen Russillo, and Vilma Chuy.
"Mware has built a category dominating virtualization franchise but is increasingly reliant on new product adjacencies to maintain their growth and margin profile," the analysts wrote. "Our view is that new growth initiatives have significant potential but aren't growing fast enough or are large enough to offset natural market saturation in the core. We are comfortable with our Q2 forecast and guidance as we believe the June quarter was relatively sound and has the last easy license booking comp of the year (FQ2 13 -2%). Looking forward though, we don't expect much in the way of upside potential in FH2 2014 given the waning benefit of ELA's and very difficult comparisons to FH2 2013."
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Separately, TheStreet Ratings team rates VMWARE INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate VMWARE INC (VMW) a BUY. This is driven by a number of strengths, 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, solid stock price performance, impressive record of earnings per share growth and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."