Waiting For a VMware Pullback: Expensive Today, But Future Looks Promising

Oct.30.07 | About: VMware, Inc. (VMW)

VMware (NYSE:VMW) has been on a tear ever since its IPO earlier this year. Usual metrics - e.g., P/E ratio - for evaluating stocks will tell you that it is expensive today.

However, if we look at the essential value that it adds to the computing environment, it seems to have some properties that are very perpetual. End nodes - namely, desktops, laptops, servers, etc. - now can be very versatile, thanks to the software VMware.

In other words, the ubiquity of VMware seems to be very assured. Thus, the company VMware seems to have the strength to remain alongside Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), etc., in a permanent lineup. With the cash the company is generating, it has the wherewithal to enter adjacent markets.

I'll wait for some pull back in the stock to take a long position.

Disclosure: none