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?
- The Year Over Year (YoY) revenue growth for Red Hat was 17.5% in 2017 Q3.
- The TTM operating margin was good at 13.3% for Red Hat.
- Net margins stood at a healthy 10.4% (average) for Red Hat in the Trailing Twelve Months.
- The company has an operating cash flow which is 2 times the net income. We see this as a positive signal.
- 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 healthy free cash flow margin of 19.4%.
Should you sell RHT stock?
- Red Hat is debt laden and has a high debt/equity ratio of 0.58.
- The RHT stock currently trades at a PE of 57.3, which is expensive, compared to the industry average of 25.8.
- RHT stock is trading at a PS multiple of 6.5, which is a negative when compared to the Computer-Software industry average multiple of 2.5.