#VMware reported Q1 results, beating expectations and showing more than 9% revenue growth YoY. Strangely, the stock responded negatively. The business of VMware is very attractive, as the products and services imply exposure to the cloud and IoT industries, which are growing rapidly. The list of strategic partners includes such big names as #Amazon, #Microsoft, #IBM, #Cisco, and others. DCF analysis shows the stock is significantly undervalued. The fair price range is $96.9-106.6, which represents 10-22% upside potential. On June 1, 2017, VMware (NYSE:VMW) reported Q1 results, beating on both EPS and revenue and showing more that 9% growth YoY. However, the price of the stock responded surprisingly negatively to this news, dropping from $98 to $87.6 in just 7 trading days. I believe this provides a decent opportunity to invest in the company, since the fundamentals are strong and the business is promising. This article shows why VMW is a strong buy and values the stock using DCF model.
VMware's business state
The primary solutions offered by VMware include virtualization and cloud infrastructure. One of the main products of the company that experiences an increasing adoption by many data center providers is Software-Defined Data Center (SDDC) powered by four product categories: compute; storage and availability; network and security; management and automation.
The SDDC is designed to transform and modernize the data center into an on-demand service that addresses application requirements by abstracting, pooling and automating the services that are required from the underlying hardware. SDDC promises to dramatically simplify data center operations and lower costs.
Another important set of solutions is Hybrid Cloud Computing, powered by Cross-Cloud Architecture. The primary aim of the offer is to enhance secure application management, automation and networking consistency across many private and public clouds.
https://seekingalpha.com/article/4080651-vmware-significantly-undervalued-cloud-iot-player
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