Red Hat (RHT): Impressive Quarter - UBS

September 22, 2016 9:28 AM EDT
Get Alerts RHT Hot Sheet
Price: $78.21 +1.62%

Rating Summary:
    26 Buy, 10 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 26 | Down: 29 | New: 38
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UBS analyst, Brent Thill, reiterated his Buy rating on shares of Red Hat (NYSE: RHT) and raised his price target to $90 from $85 after posting 20% y/y growth in both subscription revenue (highest Q2 number in 5 yrs) and billings (beat by $16M, but off light 9% comp).

The analyst stated "We were impressed by strength in the core infrastructure business, which returned to high-teens growth (+18%/17% CC vs. 1Q17 +14%/13%) in the face of a bear thesis expecting more negative impacts from the cloud. Growth from the emerging products portfolio slowed to 33%/32% in CC (vs. +39% for both in FQ1). While we would certainly like to see more evidence of a breakout play beyond core RHEL, we note FY17 investments appear front-end loaded, with 1H headcount up 25%, which should provide a boost to 2H growth across the broader portfolio".

For an analyst ratings summary and ratings history on Red Hat click here. For more ratings news on Red Hat click here.

Shares of Red Hat closed at $77.04 yesterday.

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