Red Hat (RHT): Impressive Quarter - UBS
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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".
Shares of Red Hat closed at $77.04 yesterday.
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