Can VMWare Keep Beating Its Earnings Expectations?
In these economic times, you'd expect companies would be willing to spend money on virtualization software in order to save even more by not buying expensive computing hardware. However, corporate demand has not led to rapid recent growth: VMWare's revenues grew a mere 3.7% in the third quarter of 2009 and totaled $1.9 billion over the last 12 months.
At least one analyst thinks VMWare's prospects are good, though. TheStreet.com reports that Barclays raised earnings estimates for VMWare to 96 cents per share for 2009 and $1.15 for 2010. Barclays is also expecting strong results when VMWare reports today and has set a price target of $41.
Since VMWare's stock opened the week above that, and was oscillating around the $42 level on Monday morning, I'd guess it would take a big upside earnings surprise to push the stock up much further.
Peter Cohan has no financial interest in VMWare securities.