Red Hat (RHT) Stock Rating Lowered by Zacks Investment Research

Red Hat (NYSE:RHT) was downgraded by Zacks Investment Research from a “strong-buy” rating to a “hold” rating in a report released on Wednesday.

According to Zacks, “Red Hat is benefiting from improved linearity driven by on-time renewal of deals. This reflects strong demand for hybrid cloud technology solutions as well as aggressive cross-selling. Moreover, robust performance by the Services business based on strong demand for the Ansible solution is a key catalyst. Expected strong demand for containers is another growth driver. Red Hat’s expanding partner base that includes IBM, Intel, Dell, Google, Microsoft, Amazon and Alibaba is noticeable. 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 Q1 earnings release. The company has positive record of earnings surprises in recent quarters. However, stiff competition is a headwind. Pivotal Container Service (PKS) formed through the partnership of Google, Pivotal and VMware is a significant threat in this regard.”

A number of other equities research analysts have also issued reports on the company. Monness Crespi & Hardt lifted their target price on Red Hat from $175.00 to $200.00 and gave the company a “buy” rating in a research report on Monday, May 14th. Royal Bank of Canada lifted their target price on Red Hat to $180.00 and gave the company a “positive” rating in a research report on Wednesday, May 9th. Robert W. Baird restated a “hold” rating and issued a $170.00 price target on shares of Red Hat in a research note on Wednesday, May 9th. ValuEngine upgraded Red Hat from a “buy” rating to a “strong-buy” rating in a research note on Wednesday, May 2nd. Finally, Deutsche Bank raised their price target on Red Hat to $185.00 and gave the company a “buy” rating in a research note on Tuesday, April 17th. One investment analyst has rated the stock with a sell rating, ten have issued a hold rating, twenty-three have assigned a buy rating and one has assigned a strong buy rating to the company. The company currently has an average rating of “Buy” and a consensus target price of $157.27.

Shares of Red Hat opened at $162.42 on Wednesday, MarketBeat reports. Red Hat has a 52-week low of $86.26 and a 52-week high of $173.58. The company has a market capitalization of $28.95 billion, a P/E ratio of 70.62, a PEG ratio of 4.04 and a beta of 1.07. The company has a current ratio of 1.36, a quick ratio of 1.36 and a debt-to-equity ratio of 0.51.

Red Hat (NYSE:RHT) last announced its earnings results on Monday, March 26th. The open-source software company reported $0.91 earnings per share (EPS) for the quarter, beating the Zacks’ consensus estimate of $0.81 by $0.10. Red Hat had a return on equity of 29.36% and a net margin of 8.86%. The business had revenue of $772.00 million for the quarter, compared to analyst estimates of $761.87 million. During the same quarter last year, the firm earned $0.61 EPS. Red Hat’s revenue for the quarter was up 22.8% compared to the same quarter last year. research analysts forecast that Red Hat will post 2.52 earnings per share for the current year.

In related news, CEO James M. Whitehurst sold 4,422 shares of the business’s stock in a transaction on Tuesday, April 17th. The stock was sold at an average price of $161.32, for a total value of $713,357.04. Following the completion of the sale, the chief executive officer now directly owns 346,645 shares in the company, valued at approximately $55,920,771.40. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, EVP Arun Oberoi sold 15,000 shares of the business’s stock in a transaction on Monday, April 9th. The shares were sold at an average price of $153.58, for a total value of $2,303,700.00. Following the completion of the sale, the executive vice president now owns 74,457 shares of the company’s stock, valued at $11,435,106.06. The disclosure for this sale can be found here. Insiders sold a total of 107,376 shares of company stock valued at $17,167,724 over the last 90 days. 0.66% of the stock is currently owned by corporate insiders.

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Suntrust Banks Inc. boosted its stake in Red Hat by 19.9% in the 1st quarter. Suntrust Banks Inc. now owns 53,181 shares of the open-source software company’s stock valued at $7,950,000 after purchasing an additional 8,823 shares during the period. Amalgamated Bank boosted its stake in Red Hat by 10.8% in the 1st quarter. Amalgamated Bank now owns 25,925 shares of the open-source software company’s stock valued at $3,876,000 after purchasing an additional 2,535 shares during the period. Summit Trail Advisors LLC boosted its stake in Red Hat by 17,117.4% in the 1st quarter. Summit Trail Advisors LLC now owns 137,395 shares of the open-source software company’s stock valued at $137,000 after purchasing an additional 136,597 shares during the period. WINTON GROUP Ltd boosted its stake in Red Hat by 1.8% in the 1st quarter. WINTON GROUP Ltd now owns 108,261 shares of the open-source software company’s stock valued at $16,186,000 after purchasing an additional 1,883 shares during the period. Finally, CIBC World Markets Inc. bought a new stake in Red Hat in the 1st quarter valued at $1,250,000. Institutional investors and hedge funds own 95.52% of the company’s stock.

Red Hat Company Profile

Red Hat, Inc provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide. It offers infrastructure-related solutions, such as Red Hat Enterprise Linux, an operating system platform that runs on hardware for use in hybrid cloud environments; Red Hat Satellite, a system management offering that helps to deploy, scale, and manage in hybrid cloud environments; and Red Hat Enterprise Virtualization, a software solution that allows customers to utilize and manage a common hardware infrastructure to run multiple operating systems and applications.

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