Red Hat Inc. Stock Buy Recommendation Reiterated (RHT)
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- RHT's revenue growth has slightly outpaced the industry average of 8.2%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- RHT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for RED HAT INC is currently very high, coming in at 89.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.90% is above that of the industry average.
- Net operating cash flow has increased to $103.85 million or 34.69% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 20.97%.
- Compared to its closing price of one year ago, RHT's share price has jumped by 39.88%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
--Written by a member of TheStreet Ratings Staff. FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge! Free Download Now
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