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Which firm has bigger market cap: VMware or Adobe?

When recent IPO's in tech stocks reach $20 Billion and $25 Billion in market capitalization rates, it is always interesting to see how this compares to other giants in related sectors. Surprisingly, depending on which source you use, the market capitalization rates are virtually identical for VMware (NYSE:VMW) and Adobe Systems (NASDAQ:ADBE).

Here is how the quarterly earnings and growth rates stack up against each other:

  • VMware showed its financial filings of its second quarter on Monday (which were already mostly known), and the results were $296.8 million in revenues (up almost 90% over Q2 2006) and earnings rose over 100% to $34.2 million, or $0.10 on an EPS basis.
  • Adobe's earnings which were not previously known also came out on Monday. The company posted profits of $205 million, or $0.45 EPS on a non-GAAP basis, on revenues of $851.7 million (up 41% from the same period in 2006). The company did already acknowledge that its growth rates would slow in 2008 because it acknowledges that some growth rates are sustainable for only so long.

Market Cap Comparisons:

  • Based on a 332.5 million share count on VMware and a $77.50 stock price, we get a $25.768 Billion market cap. The calculations on the true share count create different market caps around the web: Yahoo! Finance lists $25.78 Billion as the market cap, Google Finance lists the share count at 382.94 million and gives it a $29.68 Billion market cap, MarketWatch lists the shares outstanding as 375.12 million and gives it a $29.07 Billion market cap, and AOL Money & Finance severely undercounts the shares ate twice the free float so its market cap is only listed as $5.82 Billion.
  • Adobe calculated on Monday that for the coming quarter, its share count will be 588 million to 590 million. Lets split the difference at 589 million and with a $43.50 stock price we get an implied market cap of $25.6215 Billion.
  • If you want to compare other desktop and server software companies and the market caps, here goes: Citrix (CTXS) $7 Billion; Symantec (SYMC) $17.5 Billion; Intuit (INTU) $9.9 Billion.
  • The actual market caps on an exact basis is not the important part of this. The most important part is looking at the comparison of how close each market cap is to the other.


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