New Lifetime High Reached By Red Hat (RHT)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.
Trade-Ideas LLC identified
(
) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Red Hat as such a stock due to the following factors:
- RHT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $112.8 million.
- RHT has traded 176,666 shares today.
- RHT is trading at a new lifetime high.
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More details on RHT:
Red Hat, Inc. provides open source software solutions to enterprise customers worldwide. It develops and offers operating system, virtualization, middleware, storage, and cloud technologies. RHT has a PE ratio of 73.9. Currently there are 19 analysts that rate Red Hat a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Red Hat has been 1.3 million shares per day over the past 30 days. Red Hat has a market cap of $12.7 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.48 and a short float of 4.2% with 4.65 days to cover. Shares are up 0.4% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Red Hat as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- RHT's revenue growth has slightly outpaced the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 15.0%. 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.
- Net operating cash flow has increased to $132.99 million or 39.75% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.67%.
- RED HAT INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, RED HAT INC increased its bottom line by earning $0.93 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($1.58 versus $0.93).
- The gross profit margin for RED HAT INC is currently very high, coming in at 87.64%. Regardless of RHT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RHT's net profit margin of 10.51% is significantly lower than the industry average.
- Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.25 is sturdy.
- You can view the full Red Hat Ratings Report.
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