VMWare (VMW) posted earnings on July 21st for Q2 FY'15 and the stock saw immediate improvement reminiscent of the stock's reaction to VMWare's earnings report for Q1 of the same same year. On the day of reporting, VMWare was trading at about the same price we bought the stock for in April. In the time between then and now the stock was showing promising potential and was trading in the high $80 range teetering $90. The stock took a sharp decline which was attributable to a legal litigation in regards to pricing. The stock quickly picked up following the Q2 earnings report where VMW beat consensus by $0.02.
VMWare posted revenue of $1.6 billion which reflects 10% year over year growth. The growth is a reflection of consistent market dominance and realization in revenue with recently acquired AirWatch. A catalyst, in my opinion for future growth for revenues because of the movement into the mobile space. With AirWatch up 60% in YoY growth in license bookings, I see the company taking advantage of consistent high growth in that sector attributing to our price target being met in our investment horizon.
Following the earnings release, VMWare traded up as high as $90 and is sitting at that range which is a different story when compared to what happened following Q1 close. The stock rose following Q1 earnings release to $90 but then dropped quite a bit in the following days. VMW is now showing consistency in $90 range and I am very optimistic that the stock will reach our price target within an appropriate time frame.
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