Red Hat (RHT): Reit Buy On Strong Billings Growth - Needham
- Top 10 News for 10/17 - 10/21: Merger Rumors Abound; CEOs Depart; Tesla Kicks Autopilot Up A Notch
- Wall Street ends little changed; Microsoft hits record
- AT&T (T) in Advanced Talks to Acquire Time Warner (TWX) - DJ
- Rockwell Automation (ROK) Said to Attract Takeover Interest from Schneider Electric - Source
- British American Tobacco Offers to Acquire Remaining Shares of Reynolds American (RAI) for $56.50/Share
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
Needham & Company analyst Scott Zeller reiterated its Buy rating on shares of Red Hat (NYSE: RHT) after the company posted quarterly results showing accelerating billings growth while the broader software community confronts IT spending headwinds.
The analyst highlighted the $1m+ deal count of 55 deals, +60% y/y, demonstrating the power of Linux upsell as it displaces UNIX and as big banks adopt Cloud Infrastructure. Billings performance of +20% y/y is the best growth rate in 18 months, and is RHT's most closely watched metric. When looking at “core” vs. “new” products, the RHEL Infrastructure group did better than expected at +18%; we note the “cloud” business (CSP, etc) is reported as part of “core” and likely supports growth.
Estimates increased for FY17, but there is no change to FY18. No change to the price target of $98 which equates to 6x EV/FY18 revenue and 23x FY17 EV/FCF.Shutterfly (NASDAQ: SFLY)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Imperial Capital Raises Price Target on Proofpoint (PFPT) Following Strong 3Q Results
- SunTrust Raises Price Target on E*TRADE Financial (ETFC) to $31 Following Solid 3Q
- Stifel Upgrades PayPal (PYPL) to Buy Following 'Solid' Q3 Results
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View
Related EntitiesNeedham & Company
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!