Red Hat (RHAT) shares are higher today, ahead of tomorrow’s expected fiscal second quarter earnings report tomorrow.
Jason Maynard, an analyst at Credit Suisse, repeated his Outperform rating on the stock this morning, asserting that the shares “represent an excellent buying opportunity” ahead of tomorrow’s report. He says the company has “a 30%-plus, multi-year growth opportunity.” He says in the mid-20s, the stock reflects concerns about integration issues with the company’s JBoss acquisition; deceleration in its core Linux market; and a competitive move by Oracle. “In our opinion, the Q2 results will be solid enough to put to rest some of those near-term concerns and push the stock higher,” he says.
Maynard is expecting results tomorrow to be in line with previous guidance for $96 million to $98 million in revenue, with 15%-16% operating margins. He also thinks the company will maintain its previous fiscal 2007 guidance for revenue of $400 million to $405 million, with operating margins of 19%-20%; and cash flow of $225 million to $235 million.
Red Hat shares today are up 87 cents, to $25.97.