VMware, Inc.
VMware, Inc. Fundamental Analysis
VMware, Inc. (VMW) shows weak financial fundamentals with a PE ratio of 45.88, profit margin of 9.84%, and ROE of 3.99%. The company generates $13.6B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 36.4/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze VMW's fundamental strength across five key dimensions:
Efficiency Score
WeakVMW struggles to generate sufficient returns from assets.
Valuation Score
ModerateVMW shows balanced valuation metrics.
Growth Score
ModerateVMW shows steady but slowing expansion.
Financial Health Score
WeakVMW carries high financial risk with limited liquidity.
Profitability Score
WeakVMW struggles to sustain strong margins.
Key Financial Metrics
Is VMW Expensive or Cheap?
P/E Ratio
VMW trades at 45.88 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, VMW's PEG of 0.46 indicates potential undervaluation.
Price to Book
The market values VMware, Inc. at 39.30 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 20.43 times EBITDA. This signals the market has high growth expectations.
How Well Does VMW Make Money?
Net Profit Margin
For every $100 in sales, VMware, Inc. keeps $9.84 as profit after all expenses.
Operating Margin
Core operations generate 15.15 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $3.99 in profit for every $100 of shareholder equity.
ROA
VMware, Inc. generates $4.21 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
VMware, Inc. generates strong operating cash flow of $4.39B, reflecting robust business health.
Free Cash Flow
VMware, Inc. generates strong free cash flow of $3.93B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $9.10 in free cash annually.
FCF Yield
VMW converts 6.26% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
45.88
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.46
vs 25 benchmark
P/B Ratio
Price to book value ratio
39.30
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.61
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
7.36
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.83
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
3.99
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How VMW Stacks Against Its Sector Peers
| Metric | VMW Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 45.88 | 34.79 | Worse (Expensive) |
| ROE | 399.39% | 1185.00% | Weak |
| Net Margin | 9.84% | -131296.00% (disorted) | Weak |
| Debt/Equity | 7.36 | 0.43 | Weak (High Leverage) |
| Current Ratio | 0.83 | 4.90 | Weak Liquidity |
| ROA | 4.21% | -325472.00% (disorted) | Weak |
VMW outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews VMware, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Growth, Innovation, High Beta
EPS CAGR
N/A
Industry Style: Growth, Innovation, High Beta
FCF CAGR
N/A
Industry Style: Growth, Innovation, High Beta