What To Watch For In VMware’s Q4 Results

VMware (NYSE:VMW) is scheduled to report its fourth quarter and full year earnings on Thursday, February 28. In addition to management’s outlook on the traction from the VMware Cloud on Amazon, we will be looking for any updates on the company’s plans for achieving containers running atop virtual machines.

We have revised our price estimate upward to $150 per share, which is around 10% lower than the current market price. Our interactive dashboard on VMware’s Price Estimate outlines our forecasts and estimates for the company. You can modify any of the key drivers to visualize the impact of changes on its valuation, and see all Trefis technology company data here.

VMware’s investments in ramping up technological and sales capacity in anticipation of the growth in hybrid and multi-cloud environments have proven to be prescient. Not only has the market rewarded the company with a 60%-plus stock price increase over the past year, the likes of AWS (and more broadly Amazon) have made significant commitments: Amazon has committed to leverage VMware’s software stack to enter into the on-premise hardware business.

The advent of IoT/edge computing, coupled with mobility and AI, are likely to contribute significantly to the need for multi-cloud deployments. We note that VMware is the technology integrator equivalent in the cloud world, with hybrid cloud driving demand for VMware’s integration solutions.

The company’s management has also been correct about IT spending outpacing broader economic growth, and we will be listening for commentary around management’s revenue guidance for 2019, and whether it is revised upwards.

Do not agree with our forecast? Create your own price forecast for VMware by changing the base inputs (blue dots) on our interactive dashboard.