Red Hat Stock Analysis (NYSE:RHT)
Red Hat Analysis Video
View Red Hat stock analysis video. This is our RHT analyst opinion covering the buy and sell arguments for RHT stock.
Red Hat Inc Stock Rating (3.5/5)
Our Red Hat stock opinion is based on fundamentals of the company. This Red Hat stock analysis is based on latest Q3 earnings for 2017. The stock price analysis takes into account a company's valuation metrics.
Should you buy RHT stock?
- Red Hat's revenue growth came in at 17.5% in 2017 Q3.
- Red Hat's average operating margin of 13.3% was exceptional.
- Net margins stood at a healthy 10.4% (average) for Red Hat in the Trailing Twelve Months.
- The operating cash flow looks good at 2 times the net income.
- Red Hat generates a high return on invested capital of 28.7%.
- Red Hat has a good Return On Equity (ROE) of 18.2%.
- The company has a good Free Cash Flow (FCF) margin of 19.4%.
Should you sell RHT stock?
- Red Hat has a debt/equity ratio of 0.58, which is worse than the average in the Computer and Technology sector.
- Trading at a PE ratio of 55.8, RHT stock is overvalued in comparison to industry average multiple of 25.5.
- The company is trading at a price to sales multiple of 6.4, which is higher in comparison to the Computer-Software industry average of 2.6, making RHT stock expensive.