RHT

Does Red + Blue = Green

October 30, 2018 Summary IBM announced its agreement to acquire Red Hat for cash. The purchase price is $190 share – a 62% premium to Red Hat’s prior quotation. The EV/S level of the transaction, based on prior former growth assumptions for Red Hat, is around 8.5X-9X. The transaction is all about revenue synergy and…

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September 27, 2018 Summary Last week, Red Hat reported the results of its fiscal Q2. The results, and the guidance, particularly on the top-line, proved to be disappointing. The shares fell another 10% and they are down 20% from their recent high. The company’s bookings performance was better than its revenue performance. The issues that…

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Dec. 26, 2017 Summary Last week, Red Hat announced the results of its fiscal Q3. The results were another in a line of noticeable beats, and the company increased its forecast, again at a cadence consistent with the recent past. Shares reacted negatively to the beat and raise, presumably reflecting a strategy of buying rumors…

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Sep. 28, 2017 Summary Red Hat reported the results of its fiscal Q2 Monday afternoon. The results were a substantial beat in terms of EPS, revenues and cash flow from operations. Guidance was raised to an extent, but by significantly less than the results of Q2 might portend. The company is achieving breakthrough success with…

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Jun. 22, 2017 Summary Red Hat reported the results of its fiscal Q1 Tuesday evening. The results were considered to be a blow-out with revenues, earnings, bookings and guidance all showing better performance by a significant extent than had been anticipated. The company saw broad strength with its new product initiatives growing more than 40%…

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Mar. 30, 2017 Summary Red Hat reported the results of its fiscal Q4 earlier this week. The results, looked at holistically, were one of the strongest quarters the company has printed in some years. In particular, bookings and backlog were very strong, and while not totally apparent, the company’s GAAP expense ratios showed significant improvement.…

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Dec. 23, 2016 Summary Red Hat reported the results of its fiscal Q3 Wednesday evening. The shares fell 14% in yesterday’s trading reflecting what is perceived to be a shortfall in the company’s bookings metric which grew 13% compared to prior expectations for 15%-16% grow2th. Other concerns were raised about the company’s Q4 guidance although…

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September 22, 2016 Summary Red Hat reported the results of its fiscal Q2 last evening. The quarter was a beat and a raise and showed significant growth acceleration from the results of the prior quarter. While operating margins met prior expectations, there is much runway for seeing a significant improvement. The company saw remarkable growth…

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Apr. 28, 2016 10:06 AM ET Summary Red Hat is best known as the leading vendor of open source Linux solutions. The company is still enjoying mid-to-high teens growth in that space. The company has recently introduced products in what is known as the OpenStack initiative that enhance the performance of the hybrid cloud. The…

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