Why Red Hat (RHT) Stock Is Down Today

NEW YORK (TheStreet) -- Red Het (RHT) was falling 4.7% to $57.85 Friday after guiding below analysts' estimates for earnings and revenue in the third quarter and despite beating estimates in the second quarter.

For the second quarter the software company reported earnings of 41 cents a share, beating the 38 cents a share analysts surveyed by Thomson Reuters expected. Revenue grew 19.2% year over year to $445.9 million for the quarter, beating analysts' estimates of $437.13 million for the quarter.

Looking to the third quarter Red Hat expects earnings of 40 cents a share, below analysts' estimates of 41 cents a share for the quarter. The company expects revenue of $449 million to $452 million for the third quarter, compared to analysts' estimates of $457.8 million for the quarter.

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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 multiple strengths, 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 robust revenue growth, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

You can view the full analysis from the report here: RHT Ratings Report

RHT Chart RHT data by YCharts

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