Zacks Investment Research upgraded shares of Red Hat (NYSE:RHT) from a hold rating to a buy rating in a research note released on Tuesday. The brokerage currently has $140.00 price target on the open-source software company’s stock.
According to Zacks, “Red Hat is benefiting from strong deal wins, improving recurring revenues and cross-selling of cloud-based technology. The company continues to be benefited from strong subscription revenues and margin expansion driven by lower costs. We believe that a strong partner base that includes IBM, Intel, Dell , Google and Microsoft is the key catalyst. This will continue to help in expanding Red Hat's product portfolio, which will ultimately improve customer base. We note that the company has outperformed the industry on a year-to-date basis. Estimates have been stable lately ahead of the company’s Q3 earnings release. The company has mixed record of earnings surprises in recent quarters. However, intensifying competition, growing U.S. government exposure and foreign exchange volatility are some of the headwinds. Higher acquisition related expenses is also hurting profitability.”
Other analysts also recently issued reports about the stock. Bank of America reissued an underperform rating and set a $115.00 target price on shares of Red Hat in a research note on Tuesday, October 24th. Credit Suisse Group initiated coverage on shares of Red Hat in a research note on Tuesday, September 5th. They set a neutral rating and a $111.00 target price on the stock. Piper Jaffray Companies reissued a hold rating and set a $100.00 target price on shares of Red Hat in a research note on Sunday, August 27th. Moffett Nathanson initiated coverage on shares of Red Hat in a research note on Wednesday, September 6th. They set a buy rating on the stock. Finally, KeyCorp reissued an overweight rating and set a $121.00 target price on shares of Red Hat in a research note on Friday, September 8th. One equities research analyst has rated the stock with a sell rating, nine have given a hold rating and twenty-four have given a buy rating to the company. The company presently has an average rating of Buy and an average price target of $111.86.
Red Hat (NYSE RHT) traded up $1.86 during midday trading on Tuesday, hitting $123.80. The company’s stock had a trading volume of 1,153,900 shares, compared to its average volume of 1,658,151. The company has a market capitalization of $21,740.44, a PE ratio of 67.00, a P/E/G ratio of 3.87 and a beta of 1.19. Red Hat has a 52 week low of $68.54 and a 52 week high of $129.61. The company has a debt-to-equity ratio of 0.54, a current ratio of 1.30 and a quick ratio of 1.30.
Red Hat (NYSE:RHT) last posted its quarterly earnings results on Monday, September 25th. The open-source software company reported $0.77 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $0.67 by $0.10. The company had revenue of $723.60 million for the quarter, compared to analysts’ expectations of $699.56 million. Red Hat had a return on equity of 25.27% and a net margin of 11.49%. The firm’s revenue was up 20.6% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.55 earnings per share. sell-side analysts predict that Red Hat will post 2 earnings per share for the current year.
In related news, insider Michael A. Kelly sold 2,888 shares of the company’s stock in a transaction on Wednesday, October 18th. The shares were sold at an average price of $121.03, for a total value of $349,534.64. Following the completion of the sale, the insider now directly owns 8,751 shares in the company, valued at $1,059,133.53. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, EVP Delisa Alexander sold 1,073 shares of the company’s stock in a transaction on Tuesday, October 17th. The stock was sold at an average price of $120.36, for a total transaction of $129,146.28. Following the completion of the sale, the executive vice president now owns 38,150 shares of the company’s stock, valued at $4,591,734. The disclosure for this sale can be found here. Insiders sold 34,172 shares of company stock valued at $3,926,377 over the last quarter. 0.66% of the stock is currently owned by corporate insiders.
Large investors have recently modified their holdings of the stock. D.A. Davidson & CO. lifted its position in Red Hat by 6.8% during the 2nd quarter. D.A. Davidson & CO. now owns 1,071 shares of the open-source software company’s stock worth $102,000 after acquiring an additional 68 shares during the last quarter. Nordea Investment Management AB lifted its position in Red Hat by 1.3% during the 2nd quarter. Nordea Investment Management AB now owns 7,011 shares of the open-source software company’s stock worth $671,000 after acquiring an additional 92 shares during the last quarter. Gyroscope Capital Management Group LLC lifted its position in Red Hat by 4.0% during the 2nd quarter. Gyroscope Capital Management Group LLC now owns 2,429 shares of the open-source software company’s stock worth $233,000 after acquiring an additional 93 shares during the last quarter. Outfitter Advisors LTD. lifted its position in Red Hat by 0.9% during the 2nd quarter. Outfitter Advisors LTD. now owns 11,120 shares of the open-source software company’s stock worth $1,065,000 after acquiring an additional 100 shares during the last quarter. Finally, Gofen & Glossberg LLC IL lifted its position in Red Hat by 0.3% during the 2nd quarter. Gofen & Glossberg LLC IL now owns 44,097 shares of the open-source software company’s stock worth $4,222,000 after acquiring an additional 151 shares during the last quarter. Hedge funds and other institutional investors own 93.85% of the company’s stock.
About Red Hat
Red Hat, Inc (Red Hat) provides open source software solutions, using a community-powered approach to develop and offer operating system, virtualization, management, middleware, cloud, mobile and storage technologies. Red Hat operates through three geographical segments: the Americas, including the United States, Canada and Latin America; EMEA, including Europe, Middle East and Africa, and Asia Pacific.
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