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Company Profile

Red Hat, Inc. provides open source software solutions to enterprises worldwide. It also offers enterprise-ready open source operating system platforms.

Red Hat (NYSE:RHT) is scheduled to report its first quarter earnings results on June 20, 2012, after market close.

Technical Overview

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Red Hat has a market cap of $10.75 billion and it is currently trading around $55.76 with a 52 week range of $31.77 to $62.75. The stock has 35.04% price performance for the year 2012. The following table provides the key financial ratios for Red Hat:

Key RatioValue
Current Ratio1.48
Forward P/E38.72
Profit Margin12.94%
Return On Assets (ROA)6.25%
Return On Equity (ROE)10.90%

Recent News

  • On June 6, 2012, Red Hat announced the next step in its delivery of open hybrid cloud solutions to enterprises with the general availability of Red Hat CloudForms. CloudForms is an open hybrid cloud management platform built to enable enterprises to create and manage Infrastructure-as-a-Service (IaaS) hybrid clouds with the ability to make self-service computing resources available to users in a managed, governed and secure way.
  • On May 24, 2012, Red Hat announced the appointment of enterprise software industry veteran Arun Oberoi as executive vice president of global sales and services.
  • On May 23, 2012, Red Hat announced that LetterGen NV, a Belgian supplier of document management software, has migrated its virtualized systems from VMware to Red Hat Enterprise Virtualization.
  • On May 15, 2012, Red Hat celebrated the 10th anniversary of its flagship solution, Red Hat Enterprise Linux, which has transformed the deployment of business-critical applications for IT organizations around the globe.
  • On May 9, 2012, Red Hat announced its strategy for OpenShift Platform-as-a-Service (PAAS), the leading open cloud application platform for enterprises, to enable enterprises to take advantage of the benefits of PaaS by providing a consistent environment for both public cloud and on-premise datacenter usage.
  • On May 9, 2012, Red Hat and IBM (NYSE:IBM) announced that Red Hat Enterprise Linux 5 with the KVM hypervisor on IBM Systems has been awarded Common Criteria Certification at Evaluation Assurance Level 4+ (EAL4+).
  • On May 8, 2012, Dell (NASDAQ:DELL) and Red Hat announced they have signed an agreement to produce Dell and Red Hat hardware/software solutions for IT manufacturers worldwide.
  • On May 7, 2012, Red Hat announced the expansion and launch of two Engineering Centers of Excellence in Bangalore and Pune, India.
  • On April 3, 2012, Red Hat and INTTRA, the world's largest multi-carrier e-commerce network for ocean freight, announced that INTTRA will implement several solutions from the Red Hat JBoss Middleware portfolio to enhance and speed the delivery of business solutions for the shipping industry.

Here's a list of recent changes to analyst ratings:

  • On May 31, 2012, Mizuho Securities initiated coverage on Red Hat with a BUY rating and set the price target as $60.00.
  • On May 4, 2012, BMO Capital initiated Red Hat with an OUTPERFORM and set the price target as $72.00.
  • On May 4, 2012, Stifel Nicolaus' Brad Reback initiated coverage on Red Hat with a BUY rating and set the price target as $70.00.
  • On March 29, 2012, Drexel Hamilton reiterated a BUY on Red Hat and raised the price target from $52.00 to $65.00.

Analyst Guidance and Earnings History

The first quarter revenues are expected to be $310.87 million when compared to $264.75 million for the same quarter last year. Earnings per share for the first quarter are expected to be 27 cents a share, up from 24 cents a share in the year-ago period.

The average price target from analyst for Red Hat is $60.62 with average rating is OVERWEIGHT

Out of the last 4 quarters, Red Hat has met or exceeded the EPS estimates all the 4 times. The following chart shows the Analyst estimates history and the actual EPS results:

The following chart shows the annual summary of Sales and Net income for Red Hat:

Sources: Some of the data is taken from Google Finance, Yahoo Finance, Nasdaq, Finviz and investor sites.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research.

Additional Disclosure: I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in RHT, IBM, DELL over the next 72 hours.