Red Hat Inc. Stock Buy Recommendation Reiterated (RHT)
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- The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 17.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 1.20, which illustrates the ability to avoid short-term cash problems.
- RED HAT INC has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, RED HAT INC increased its bottom line by earning $0.77 versus $0.74 in the prior year. This year, the market expects an improvement in earnings ($1.33 versus $0.77).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Software industry average. The net income increased by 19.5% when compared to the same quarter one year prior, going from $35.97 million to $42.97 million.
- Net operating cash flow has slightly increased to $136.88 million or 6.93% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.53%.
--Written by a member of TheStreet Ratings Staff. Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.
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