Is an Investment in Red Hat Inc (NYSE:RHT) as Risky as Its Decline Suggests?

[Business Wire] Red Hat Inc (NYSE:RHT)(TREND ANALYSIS) announced the release of a community version of the Open Decision Framework, the company’s collection of its own best practices for making decisions and leading projects. The framework can help decision-makers communicate transparently, seek out diverse perspectives, collaborate more effectively across distributed teams, and limit unanticipated impacts of business projects and decisions.

Red Hat’s open culture – rooted in transparency, collaboration and meritocracy – was highlighted in The Open Organization, by Jim Whitehurst, the company’s president and CEO. Red Hat created the Open Decision Framework to help sustain and scale its open culture as it grew. As interest in open source – both in technology and as the basis of open management and culture – has taken off, Red Hat has received a number of requests from outside organizations interested in learning how to apply open source principles within their own organizations. By making its Open Decision Framework available, Red Hat hopes to empower business leaders, decision-makers, and project managers to learn from the experiences of Red Hatters and contribute their own findings back to the community.

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Red Hat Inc (NYSE:RHT) stock is currently trading 8.93% below its 52-week-high, 29.05% above its 52-week-low. The 1-year stock price history is in the range of $59.59 – $84.44. Red Hat Inc (RHT) has a price to earnings ratio of 71.87 versus Technology sector average of 24.21. RHT stock price has underperformed the S&P 500 by 9.9%. The Applications Software company is currently valued at $13.95 billion, and its share price closed the last trading session at $76.9. The stock has a 50-day moving average of $74.75 and a 200-day moving average of $74.09.

Red Hat Inc (RHT) current short interest stands at 5.03 million shares. It has increased by 7% from the same period of last month. Around 5% of the company’s shares, which are float, are short sold. With a 10-days average volume of 1.14 million shares, the number of days required to cover the short positions stand at 4.5 days.

RHT is forecasted to report earnings per share of $0.5 and a revenue of $562.76 million for the 1st Quarter of the fiscal year 2016. Red Hat Inc (RHT) expects to post results on June 22. The Applications Software company announced last quarter earnings per share of $0.51 against a consensus Street estimate of $0.48, beating the average estimate by $0.03. The company posted a revenue of $543.5 million compared to an estimation of $537.2 million.

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There are currently thirty-two analysts that cover Red Hat Inc stock. Of those thirty-two, twenty-five have a Buy rating, six have a Hold rating and one has a Sell rating. On a consensus basis this yields to an Overweight rating. The consensus target price stands at $87.97.

A recent analyst activity consisted of Pacific Crest upgrading their Sector Weight rating to Overweight on April 14. On the date of report, the stock closed at $74.45.

Bank of America reiterated their Neutral stance on March 23, and decreased their price target from $80 to $78. This corresponds to a 1.43% upside from the last closing price. On the date of report, the stock closed at $72.54.

Another research firm was Citigroup who reiterated their Buy stance on March 23. Citigroup increased their price target on Red Hat Inc from $79 to $90. This translates to a 17.04% upside from the last closing price. On the date of report, the stock closed at $72.54.

Company snapshot

Red Hat, Inc. develops and provides open source software and services, including the Red Hat Linux operating system. The Company’s Web site offers information and news about open source software and provides an online community of open source software users and developers.

Is an Investment in Red Hat Inc (NYSE:RHT) as Risky as Its Decline Suggests? was last modified: June 14th, 2016 by Steven Finley