Trade-Ideas LLC identified Red Hat ( RHT) as a post-market laggard 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 $101.3 million.
  • RHT is down 7.2% today from today's close.

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More details on RHT:

Red Hat, Inc. provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide. RHT has a PE ratio of 74. Currently there are 14 analysts that rate Red Hat a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Red Hat has been 1.2 million shares per day over the past 30 days. Red Hat has a market cap of $14.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.29 and a short float of 3.3% with 3.83 days to cover. Shares are down 2.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Red Hat as a buy. 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, growth in earnings per share and increase in net income. 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 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 17.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.10, which illustrates the ability to avoid short-term cash problems.
  • 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.
  • RED HAT INC has improved earnings per share by 11.5% 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 $1.08 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($2.24 versus $1.08).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Software industry average. The net income increased by 11.2% when compared to the same quarter one year prior, going from $47.70 million to $53.04 million.

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