NEW YORK (TheStreet) -- Shares of Red Hat  (RHT) - Get Report  closed down by 0.45% to $71.06 on Friday,  ahead of the release of the company's second quarter earnings results, due out on Monday after the closing bell.

Analysts are expecting the company to report earnings of 44 cents per share on revenue of $494.6 million for the most recent quarter.

Those totals are increases from the 41 cents per share and $446 million the company generated in the year ago period.

The company's stock reached a 52-week high of $81.49 on June 18 but the stock has lost as much as 18% since then.

TheStreet has further coverage of Red Hat here.

Separately, TheStreet Ratings team rates RED HAT INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate RED HAT INC (RHT) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 11.6%. Since the same quarter one year prior, revenues rose by 12.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • RED HAT INC has improved earnings per share by 30.0% 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 $0.97 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($1.83 versus $0.97).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 27.4% when compared to the same quarter one year prior, rising from $37.75 million to $48.09 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Software industry and the overall market, RED HAT INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $208.76 million or 26.76% when compared to the same quarter last year. In addition, RED HAT INC has also vastly surpassed the industry average cash flow growth rate of -28.87%.
  • You can view the full analysis from the report here: RHT