Mizuho Securities Reiterates Buy on Red Hat (RHT) Following 4Q Earnings Report
Mizuho Securities reiterated a Buy rating and $88. price target on Red Hat (NYSE: RHT) following the company's 4Q earnings report. RHT reported total revenues of $544mm, +17% Y/Y or +21% in constant currency. The upside was driven by subscription sales that came in at $480mm vs consensus of $474mm. Management's FY17 guidance was above expectations for revenues, EPS and cash flows while its margin forecast was slightly below.
Analyst Abhey Lamba commented, "We reiterate our Buy rating and $88 PT as RHT's results were supportive of our positive stance on the stock. The company is likely to keep benefiting from strong renewals and deeper penetration into existing accounts. F4Q16 results came in broadly ahead of expectations, although billings showed slight downside but off balance sheet backlog and large deal momentum were positive. More importantly, management guided FY17 above expectations. We continue to favor the stock on attractive valuation and potential upside to estimates."
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Shares of Red Hat closed at $75.71 yesterday.