Red Hat (NYSE:RHT) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research note issued to investors on Tuesday. The firm currently has a $140.00 price objective on the open-source software company’s stock. Zacks Investment Research‘s target price would suggest a potential upside of 16.37% from the company’s previous close.

According to Zacks, “Red Hat is benefiting from strong deal wins, improving recurring revenues and cross-selling of cloud-based technology. The company continues to be benefited from strong subscription revenues and margin expansion driven by lower costs. We believe that a strong partner base that includes IBM, Intel, Dell , Google  and Microsoft is the key catalyst. This will continue to help in expanding Red Hat's product portfolio, which will ultimately improve customer base. We note that the company has outperformed the industry on a year-to-date basis. Estimates have been stable lately ahead of the company’s Q3 earnings release. The company has mixed record of earnings surprises in recent quarters. However, intensifying competition, growing U.S. government exposure and foreign exchange volatility are some of the headwinds. Higher acquisition related expenses is also hurting profitability.”

A number of other research analysts have also recently commented on RHT. Piper Jaffray Companies restated a “hold” rating and issued a $100.00 price target on shares of Red Hat in a report on Sunday, August 27th. Credit Suisse Group started coverage on shares of Red Hat in a report on Tuesday, September 5th. They issued a “neutral” rating and a $111.00 price target on the stock. Moffett Nathanson started coverage on shares of Red Hat in a report on Wednesday, September 6th. They issued a “buy” rating on the stock. KeyCorp restated an “overweight” rating and issued a $121.00 price target on shares of Red Hat in a report on Friday, September 8th. Finally, JMP Securities upped their price target on shares of Red Hat from $107.00 to $122.00 and gave the stock an “outperform” rating in a report on Wednesday, September 13th. One analyst has rated the stock with a sell rating, nine have given a hold rating and twenty-four have given a buy rating to the company’s stock. The company currently has a consensus rating of “Buy” and an average target price of $111.86.

Shares of Red Hat (RHT) traded down $4.95 on Tuesday, hitting $120.31. 2,778,900 shares of the stock traded hands, compared to its average volume of 1,656,303. Red Hat has a 1-year low of $68.54 and a 1-year high of $129.61. The stock has a market capitalization of $22,332.36, a P/E ratio of 68.82, a P/E/G ratio of 3.98 and a beta of 1.19. The company has a current ratio of 1.30, a quick ratio of 1.30 and a debt-to-equity ratio of 0.54.

Red Hat (NYSE:RHT) last announced its earnings results on Monday, September 25th. The open-source software company reported $0.77 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.67 by $0.10. Red Hat had a net margin of 11.49% and a return on equity of 25.27%. The business had revenue of $723.60 million for the quarter, compared to the consensus estimate of $699.56 million. During the same quarter in the prior year, the firm posted $0.55 earnings per share. The business’s revenue for the quarter was up 20.6% on a year-over-year basis. sell-side analysts forecast that Red Hat will post 2 EPS for the current year.

In other Red Hat news, Director William S. Kaiser sold 14,000 shares of the stock in a transaction dated Thursday, October 5th. The shares were sold at an average price of $114.79, for a total transaction of $1,607,060.00. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, CEO James M. Whitehurst sold 12,000 shares of the stock in a transaction dated Monday, October 2nd. The shares were sold at an average price of $111.15, for a total transaction of $1,333,800.00. Following the sale, the chief executive officer now directly owns 392,979 shares of the company’s stock, valued at $43,679,615.85. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 34,172 shares of company stock worth $3,926,377. 0.66% of the stock is owned by company insiders.

Several hedge funds have recently added to or reduced their stakes in the business. Public Employees Retirement System of Ohio lifted its position in shares of Red Hat by 1.6% during the third quarter. Public Employees Retirement System of Ohio now owns 213,408 shares of the open-source software company’s stock valued at $23,658,000 after buying an additional 3,323 shares during the last quarter. IFM Investors Pty Ltd purchased a new stake in shares of Red Hat during the third quarter valued at about $554,000. Neuberger Berman Group LLC purchased a new stake in shares of Red Hat during the third quarter valued at about $13,422,000. Wunderlich Capital Managemnt lifted its position in shares of Red Hat by 330.6% during the third quarter. Wunderlich Capital Managemnt now owns 9,831 shares of the open-source software company’s stock valued at $1,090,000 after buying an additional 7,548 shares during the last quarter. Finally, Piedmont Investment Advisors LLC lifted its position in shares of Red Hat by 385.5% during the third quarter. Piedmont Investment Advisors LLC now owns 47,344 shares of the open-source software company’s stock valued at $5,249,000 after buying an additional 37,593 shares during the last quarter. 93.85% of the stock is owned by institutional investors and hedge funds.

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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.

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