Stock in enterprise software company VMware edged just over 1% in Wednesday early trading regardless of posting Q3 revenue and EPS that both beat consensus estimations. Investors are cautious following concerns regarding revenue stream misses that were also seen in the last quarter.
Edging past analyst expectations on Tuesday night, VMware posted revenue of $12.83B from $12.8B and an EPS of $7.19 from $6.90 – yet while this was enough to light up bullish sentiment, the stock still lacks the much-needed momentum seen in the software sector lately.
The placid market reaction can only be attested to further details of company revenue – the outperformance of the company rested largely on its legacy software licensing segment, which totaled revenue upwards of $700M, offsetting the slight miss from subscriptions and software-as-a-service.
VMware CFO Zane Rowe summarised… “Our performance in Q3 reflects strong year-over-year growth in major product categories as we deliver compelling value to our customers”, whilst pointing out that subscription and software-as-a-service segments were up 25% annually, yet still fell short of Wall Street expectations.
Many investors believe in the long-term success of a company that is situated so well in such a ballooning sector – especially given the US Army contract earlier this year – but we are failing to see the bullish support needed in order for VMW to appear technically feasible. VNW stock is showing a daily gain of 1.3%, with price trading around the $118 level.
Should you invest in VMware shares?
Tech stocks offer some of the best growth potential, but time and time again, traders and investors ask us “what are the best tech stocks to buy?” Have VMware shares made it onto the list of best tech stocks since its spin-off from Dell. Here is our analysts view on the best tech stocks to buy right now
