Closer Look Cuts Down Red Hat
Shares were recently off $1.31, or 5.4%, to $22.88 on heavy volume Thursday afternoon.
In a research note published Thursday, Goldman Sachs analyst Sarah Friar pointed to decelerating billing, lower deferred revenue than in prior quarters and cash flow from operations down 4% year over year as troubling signs.
She questioned whether the Raleigh, N.C.-based Linux software maker will convince the market it can provide IT infrastructure beyond the operating system. Red Hat is an investment banking client of Goldman, which makes a market in the stock.On a conference call late Wednesday, Red Hat President Charlie Peters attempted to explain away lower growth in deferred revenue. "When revenue accelerates very rapidly, it makes deferred revenue [growth] look smaller." He said billings were $143 million. "Don't get too concerned about quarterly billings and revenue," Peters said. Cash flow from operations, excluding items, was $52 million, down $2 million year on year.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV