VMW is among the hottest IPO of the year......IPO @ $27.... opened @ $51.50 friday close @ $97.74 UP $70.74 from IPO price or UP 262%....so far.....
VMW investors are INTC,HPQ,CSCO.......
VMW is breaking a "new hyper-growth area of virtualization"
Virtualization is a software which "optimizes the current hardware(servers,computers,laptops) which company owns and it is pooled together and allocated as it is needed"
Virtualization optimizes the use of various operating systems within the corporation and it can run concurrently all OS on the same PC.
So instead of buying more hardware ie servers...it gets more juice/work out of the existing servers...thus saving on hardware cost,space saving,personnel saving & elictricity saving...all through VMW software....
Currently the penetration is around 5% of entire market......it is expected to grow rapidly in the next four years to about 15% penetration......
MSFT is getting into this game with its next upgrade cycle of server operating system in middle of 2008.....still behind by almost a year to VMW current generation software.....
VMW is also introducing a "new version of its software in Nov of this year...to further consolidate its lead in virtualization optimization software"
SO....how about financials..and where it is heading......
Sales Q3 $332.12 million
Sales Q4 $382.19 million
Seq Gain +$50.07 million Q/Q
% gain seq +15% Q/Q
Sales 12/07 $1.27billion
Sales 12/08 $1.85 billion
............... +$58o million
% gain.........45.6% YoY
EPS Q3 17 cents
EPS Q4 19 cents
EPS 12/07 65 cents
EPS 12/08 93 cents
08/07 +28 cents
EPS 43% YoY
I expect VMW to guide higher than consensus for Q4......
As VMW is a new IPO....this is the first Q they will report as an independent company......
VMW is being followed by 18 analyst......
VMW high $114.88
VMW friday close $97.74
Will VMW go to new high after ER on 10/24.........only time will tell !!!!
Please do your own due diligence...as I own VMW for my portfolio.
BLOG does not give buy or sell.
Saleem
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