Red Hat Inc. Stock Buy Recommendation Reiterated (RHT)
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- The revenue growth came in higher than the industry average of 2.0%. Since the same quarter one year prior, revenues rose by 18.2%. 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.
- Net operating cash flow has slightly increased to $100.16 million or 3.72% when compared to the same quarter last year. In addition, RED HAT INC has also modestly surpassed the industry average cash flow growth rate of -4.20%.
- The gross profit margin for RED HAT INC is currently very high, coming in at 89.20%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RHT's net profit margin of 10.11% significantly trails the industry average.
- Compared to its closing price of one year ago, RHT's share price has jumped by 29.43%, 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. HOLIDAY SPECIAL: Let Jim Cramer show you every trade he is making in his $2.5 Million portfolio. Join now for 14-days FREE. Sign up today to get e-mail alerts before every trade
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