Wall Street is expecting the Raleigh, NC-based software solutions company to report earnings of 47 cents per share on revenue of $537.2 million.
During the same quarter last year, Red Hat posted adjusted earnings of 43 cents per diluted share on revenue of $464 million.
Drexel Hamilton, which has a "buy" rating and $98 price target on the stock, expects the company to beat analysts' estimates.
Red Hat's forecast for the quarter is pro forma earnings per share of 47 cents per share on sales between $535 million to $539 million, the firm noted.
"Given Red Hat's exposure to strong secular trends around open source software, the build out of the cloud and the Internet of Things, combined with strong execution in recent quarters and high visibility given its subscription-based model, we believe the stock has been unfairly punished in 2016 (down 11%) and represents an attractive value for growth investors," the firm said in an analyst note this morning.
Additionally, Drexel Hamilton projects subscription revenue will rise 18% year-over-year to $476.4 million during the 2016 fourth quarter.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on the stock.
The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity.
As a counter to these strengths, the team finds that the stock itself is trading at a premium valuation.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: RHT