Red Hat (NYSE: RHT) is one of 118 publicly-traded companies in the “Software” industry, but how does it contrast to its competitors? We will compare Red Hat to similar businesses based on the strength of its analyst recommendations, risk, valuation, profitability, institutional ownership, dividends and earnings.

Risk and Volatility

Red Hat has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Red Hat’s competitors have a beta of 0.98, indicating that their average share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

94.0% of Red Hat shares are held by institutional investors. Comparatively, 61.0% of shares of all “Software” companies are held by institutional investors. 0.7% of Red Hat shares are held by company insiders. Comparatively, 17.8% of shares of all “Software” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Red Hat and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Red Hat 11.49% 25.27% 7.43%
Red Hat Competitors -41.86% -25.02% -9.79%

Valuation and Earnings

This table compares Red Hat and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Red Hat $2.52 billion $432.71 million 67.92
Red Hat Competitors $1.51 billion $446.17 million 42.06

Red Hat has higher revenue, but lower earnings than its competitors. Red Hat is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Red Hat and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red Hat 0 9 22 0 2.71
Red Hat Competitors 257 1983 4243 84 2.63

Red Hat currently has a consensus price target of $112.48, indicating a potential downside of 0.23%. As a group, “Software” companies have a potential upside of 7.54%. Given Red Hat’s competitors higher probable upside, analysts plainly believe Red Hat has less favorable growth aspects than its competitors.

Summary

Red Hat beats its competitors on 9 of the 13 factors compared.

Red Hat Company Profile

Red Hat, Inc. (Red Hat) provides open source software solutions, using a community-powered approach to develop and offer operating system, virtualization, management, middleware, cloud, mobile and storage technologies. Red Hat operates through three geographical segments: the Americas, including the United States, Canada and Latin America; EMEA, including Europe, Middle East and Africa, and Asia Pacific. Its products and services include infrastructure-related offerings, application development-related and other technology offerings, and consulting, support and training services. Its infrastructure-related offerings include Red Hat Enterprise Linux, Red Hat Satellite and Red Hat Enterprise Virtualization. Its application development-related and other technology offerings include Red Hat JBoss Middleware, Red Hat cloud offerings, Red Hat Mobile and Red Hat Storage. Its consulting services include upgrade planning, platform migrations, solution integration and application development.

Receive News & Ratings for Red Hat Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Red Hat Inc. and related companies with MarketBeat.com's FREE daily email newsletter.