On October 13, 2023, Jean Brulard, EVP, Worldwide Sales of VMware Inc (VMW, Financial), sold 4,966 shares of the company. This move comes amidst a year where the insider has sold a total of 32,437 shares and purchased none.
Jean Brulard is a key figure in VMware Inc, a company that provides cloud computing and virtualization software and services. It operates through two segments: Software-Defined Data Center (SDDC) and End-User Computing (EUC). The SDDC segment provides solutions such as vSphere, a data center platform, which enables users to deploy hypervisor, a layer of software that resides between the operating system and system hardware to enable compute virtualization. The EUC segment provides solutions that enable a user-centric approach for IT organizations to securely deliver applications, desktops, and data to any device, anytime, anywhere.
The insider's recent sell-off raises questions about the company's current valuation and future prospects. Let's delve into the details.
The insider transaction history for VMware Inc shows a trend of more sells than buys over the past year. There have been 6 insider sells and 0 insider buys in total. This could indicate that insiders believe the stock is currently overvalued or they expect a downturn in the company's future performance.
On the day of the insider's recent sell, shares of VMware Inc were trading for $177.1 apiece, giving the stock a market cap of $77.24 billion. This is significantly higher than the company's GuruFocus Value of $135.93, suggesting that the stock is significantly overvalued.
The price-earnings ratio of VMware Inc is 54.04, which is higher than the industry median of 26.23 and the company’s historical median price-earnings ratio. This further supports the notion that the stock is overvalued.
The GF Value, an intrinsic value estimate developed by GuruFocus, is calculated based on historical multiples, a GuruFocus adjustment factor based on the company’s past returns and growth, and future estimates of business performance from Morningstar analysts. With a price-to-GF-Value ratio of 1.3, VMware Inc is considered significantly overvalued based on its GF Value.
In conclusion, the insider's recent sell-off, combined with the company's high valuation metrics, could be a signal for investors to exercise caution. As always, it's crucial to conduct thorough research and consider multiple factors before making investment decisions.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
