VMWare, Inc. (NYSE:VMW) has certainly been the darling of Wall Street ever since its shares jumped 76% on its first day of trading. Indeed, the company's final IPO filing showed an impressive 125% jump in net income. But VMWare's latest 10-Q filing with the SEC left many investors running for the exits.

VMWare's latest 10-Q filing gives investors a look into the company's cash flows, which is always the most telling of the financial statements. We already knew that the company's revenues increased 90% with net income growing 125%, but this latest filing shows operating cash flows increasing only 43%.

Why the slow increase in cash flow? Well, it turns out the company's R&D budget jumped 120% while sales and marketing costs rose 83%. Meanwhile, the company's current valuation, standing at 231x earnings, certainly indicates that the stock is overvalued when compared to its peers.

So, why the jump today? It turns out that some analysts don't think all of this is a big deal. Jefferies & Co. issued a buy rating on the stock today and increased its price target from $74 to $89. This follows many others that have issued lofty valuations for one of the hottest stocks on the market.

In the end, investors should be careful when trading VMWare. The company is clearly betting that its advertising will pay off, but the lack of organic growth makes it much less of a "Google" stock. And so far, this stock seems to be mirroring Google's post-IPO life.

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