Red Hat (RHT) Stock Edges Up in After-Hours Trading on Q4 Beat

NEW YORK (TheStreet) -- Shares of Red Hat (RHT) are gaining by 0.3% to $75.95 in after-hours trading on Tuesday, after the company posted better-than-expected results for the 2016 fourth quarter after today's closing bell.

Immediately following the results, Red Hat stock slipped in after-hours trading and then moved between gains and losses.

The Raleigh, NC-based software solutions company posted adjusted earnings of 52 cents per diluted share, topping analysts' estimates of 47 cents per share.

Revenue rose by 17% to $544 million year-over-year and surpassed Wall Street's projections of $537.2 million.

"Enterprises increasingly adopting hybrid cloud infrastructures and open source technologies drove our strong results," CEO Jim Whitehurst said in a statement this afternoon.

For the first quarter, Red Hat forecasts earnings per diluted share of 50 cents on revenue of $558 million to $566 million. Analysts are projecting earnings of 50 cents per share on revenue of $554.6 million.

The company expects earnings per share between $2.22 and $2.26 on revenue of $2.38 billion to $2.42 billion for the full year. Analysts are looking for earnings of $2.19 per share on revenue of $2.36 billion.

About 3.22 million of the company's shares were traded by today compared to its average volume of 1.75 million shares per day.

Separately, TheStreet Ratings Team has a "Buy" rating with a score of B- on the stock.

This is driven by multiple strengths, which should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks covered.

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, notable return on equity, good cash flow from operations and expanding profit margins.

The team believes 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.

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

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