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 (3.4/5)
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.
- Red Hat has an attractive ROIC (Return on Invested Capital) of 28.7%
- The LTM ROE of 18.2% for Red Hat is attractive.
- The company has a good Free Cash Flow (FCF) margin of 19.4%.
Should you sell RHT stock?
- With a debt/equity ratio of 0.58, Red Hat is highly leveraged in comparison to Computer and Technology peers.
- RHT stock is trading at a PE ratio of 56.1, which is worse than the industry average multiple of 25.7.
- The company is trading at a price to sales multiple of 6.4, which is overvalued in comparison to the Computer-Software industry average multiple of 2.6.