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Trip Chowdhry: VMware Recovery 'Impossible'

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In a new email to clients, Global Equities Research analyst Trip Chowdhry discusses how traders should handle VMWare, Inc. (NYSE: VMW)’s disappointing Q4 earnings report.

According to Chowdhry, VMWare’s below-consensus guidance for Q1 2016 and fiscal 2016 is further indication that the company is losing its market, and he sees no path for a turnaround.

“VMW has been living in denial and making a classical error that incumbents generally make – protecting the past,” he explains.

Related Link: Why This Notable Analyst Downgraded Shares Of VMware

Chowdhry believes that the firing of the CFO and 800 employee layoffs are just the beginning of the company’s downsizing. He feels that the CEO “should be the next one to go” and anticipates another 1,000 layoffs by the end of 2016.

In terms of long-term hope, Chowdhry doesn’t see anything the company can do to recover from what he calls a “secular downshift.”

The stock is down nearly 8.5 percent following its earnings report.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for VMW

Sep 2016BarclaysInitiates Coverage onEqual-Weight
Sep 2016RBC CapitalAssumesOutperform
Sep 2016JefferiesMaintainsBuy

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