Comparing VMware (NYSE:VMW) and Oracle (NYSE:ORCL)

VMware (NYSE:VMW) and Oracle (NYSE:ORCL) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Institutional and Insider Ownership

16.9% of VMware shares are owned by institutional investors. Comparatively, 47.5% of Oracle shares are owned by institutional investors. 28.5% of VMware shares are owned by company insiders. Comparatively, 39.1% of Oracle shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares VMware and Oracle’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VMware 13.75% 27.10% 7.58%
Oracle 26.34% 101.26% 10.77%

Earnings & Valuation

This table compares VMware and Oracle’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VMware $10.81 billion 6.23 $6.41 billion $4.51 35.63
Oracle $39.07 billion 5.80 $10.14 billion $3.46 22.70

Oracle has higher revenue and earnings than VMware. Oracle is trading at a lower price-to-earnings ratio than VMware, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for VMware and Oracle, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VMware 0 11 11 0 2.50
Oracle 1 17 10 0 2.32

VMware currently has a consensus price target of $173.00, indicating a potential upside of 7.67%. Oracle has a consensus price target of $71.36, indicating a potential downside of 9.13%. Given VMware’s stronger consensus rating and higher probable upside, analysts clearly believe VMware is more favorable than Oracle.

Volatility and Risk

VMware has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Oracle has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.

VMware Company Profile

VMware, Inc. provides software in the areas of hybrid and multi-cloud, modern applications, networking, security, and digital workspaces in the United States and internationally. It offers VMware multi-cloud solutions, including VMware vSphere, a data center infrastructure that provides the fundamental compute layer and utilizes its hypervisor software, a layer of software that resides between the operating system and system hardware to enable compute virtualization; vSAN and VxRail, which offers holistic data storage and protection options to all applications running on vSphere; and vRealize Cloud Management solutions that manages hybrid and multi-cloud environments running in virtual machines and containers, as well as VMware Cloud Foundation, a hybrid cloud platform that combines its vSphere, vSAN, and NSX with vRealize Cloud Management into an integrated stack and delivers enterprise-ready cloud infrastructure for private and public clouds. The company also provides networking solutions, such as VMware NSX, VMware Service-defined Firewall, VMware SD-WAN, VMware SASE, VMware vRealize Network Insight, and VMware NSX Advanced Load Balancer; digital workspace solutions that comprise Workspace ONE Unified Endpoint Management, Access, and Horizon; and application modernization solutions, such as Tanzu Basic, standard, and advanced edition, Tanzu Application Service, and Tanzu Labs. In addition, it offers intrinsic security solutions consisting of VMware Carbon Black Cloud Endpoint and Workload. The company sells its products through distributors, resellers, system vendors, and systems integrators. VMware, Inc. has strategic alliances with Amazon Web Services to build and deliver an integrated hybrid solution. The company was incorporated in 1998 and is headquartered in Palo Alto, California. VMware, Inc. is a subsidiary of Dell Technologies Inc.

Oracle Company Profile

Oracle Corporation provides products and services that address enterprise information technology environments worldwide. Its Oracle cloud software as a service offering include various cloud software applications, including Oracle enterprise resource planning (ERP) cloud, Oracle enterprise and performance management cloud, Oracle supply chain management cloud, Oracle human capital management cloud, Oracle customer experience cloud, and NetSuite application suite. The company also offers cloud-based industry solutions for various industries; Oracle application licenses; and Oracle license support services. In addition, it provides cloud and license business' infrastructure technologies, such as the Oracle Database, an enterprise database; Java, a software development language; and middleware, including development tools and others. The company's cloud and license business' infrastructure technologies also comprise cloud-based compute, storage, and networking capabilities through its Oracle cloud infrastructure as a service offerings. Further, it offers infrastructure offerings comprising Oracle autonomous data warehouse cloud service, Oracle autonomous transaction processing cloud service, Internet-of-Things, digital assistant, and Blockchain. Additionally, the company provides hardware products and other hardware-related software offerings, including Oracle engineered systems, enterprise servers, storage solutions, industry-specific hardware, virtualization software, operating systems, management software, and related hardware services. The company markets and sells its cloud, license, hardware, support, and services offerings directly to businesses in various industries, government agencies, and educational institutions, as well as through indirect channels. Oracle Corporation was founded in 1977 and is headquartered in Austin, Texas.

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