VMW - Embedded Expectations Analysis - 2021 02 08
VMware, Inc. (VMW:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 22.8x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about their new security solutions, their customer base, and service demandSpecifically, management may lack confidence in their ability to prudently manage cash, sustain Tanzu's customer momentum, and grow NSX's and vSAN's customer base. Furthermore, they may have concerns about changes to their sale force incentive and the sustainability of strong bookings. Moreover, management may be exaggerating the strength of their total backlog, the potential of their Success 360 offerings, and the capabilities of their new Carbon Black Endpoint Security with Intrinsic Security solution. They may also lack confidence in their ability to improve the security business through partnerships, combat the growing number of cyber-attacks, and sustain customer demand through their digital foundation
VMware is engaged in the development and application of technologies with x86 server-based computing, separating application software from the underlying hardware. The company's product and service solutions are organized into three main product groups: Software-Defined Data Center, which is designed to transform the data center into an on-demand service that addresses application requirements; Hybrid Cloud Computing, which is comprised of VMware Cloud Provider Program and VMware Cloud Services; and End-User Computing solution, which consists of VMware Workspace ONE, its digital workspace platform, that includes Unified Endpoint Management and VMware Horizon application and desktop virtualization.
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