Red Hat Stock Analysis (NYSE:RHT)

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$87.02 $0.4 (0.46%) RHT stock closing price Apr 21, 2017 (Closing)
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Red Hat
Updated on : Apr 21, 2017
previous close
RHT 87 (0%)
NASDAQ 5910.5 (0%)
Closing Price On: Apr 21, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Computer-Software
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q4
$million
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
13.8%
Sector Average:
5.3%
5 Quarter Net Profit
Net Margins
2017-Q4
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
745.6M
Debt/Equity Ratio:
 0.6
Compared to the industry
Cash Flow
Operating cash flow:
$318.3M
Net Income:
$65.8M
PROS      CONS
Recent Growth
Operating Margins
Net Margins
Cash Flow
ROIC
ROE
High Debt Burden
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
RHT PS :
6.4
Industry PS :
2.6
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
33.3%
Return on Equity:
19.5%
Free Cash Flow Margin:
47.6%
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Red Hat Analysis Video

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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 Q4 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 15.7% in 2017 Q4.
  • The TTM operating margin was good at 13.8% for Red Hat.
  • Net margins came in at average 10.5% for Red Hat over the last twelve months.
  • The operating cash flow looks good at 4.8 times the net income.
  • Red Hat generates a high return on invested capital of 33.3%.
  • The LTM ROE of 19.5% for Red Hat is attractive.
  • The company has a good Free Cash Flow (FCF) margin of 47.6%.

Should you sell RHT stock?

  • With a debt/equity ratio of  0.6, Red Hat is highly leveraged in comparison to Computer and Technology peers.
  • The RHT stock currently trades at a PE of 55.8, which is expensive, compared to the industry average of 25.6.
  • RHT stock is trading at a PS multiple of 6.4, which is a negative when compared to the Computer-Software industry average multiple of 2.6.

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