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Is this Large Market Cap Stock target price reasonable for Red Hat, Inc. (NYSE:RHT)?

The company in question is, Red Hat, Inc. (NYSE:RHT) currently with a stock price of 73.32 (1.41% today). The market cap for Red Hat, Inc. is 13212.1, and is in the sector Technology, and Application Software industry. The target price for Red Hat, Inc. is 87.97. Currently Red Hat, Inc. is trading with a P/E of 63.14, and a forward P/E of 27.82. Average volume for Red Hat, Inc. is 1397.07 and so far today it is 507413.

Performance in the last year for Red Hat, Inc. has been -8.95%. For EPS growth, Red Hat, Inc. has seen a growth of 12.50%, and is looking to grow in the next year to 17.44%. More long term stats show that EPS growth has been 14.30% over the last five years and could be 17.14% for the next five years. Red Hat, Inc. has seen sales growth quarter over quarter at 18.10%, with EPS growth quarter over quarter at 28.60%. The 20-day simple moving average is -2.08%, with the 200-day simple moving average coming to -2.08%.

Since the IPO date for Red Hat, Inc. on the 8/11/1999, Red Hat, Inc. has seen performance year to date to be -12.69%. With Red Hat, Inc. trading at 73.32, the dividend yield is *TBA, and the EPS is 1.15.

So could Red Hat, Inc., be undervalued? Well as said before P/E is 63.14. The PEG is 3.68, P/S is 6.18 and the P/B is at 9.7. The P/cash is 9.46, with P/free cash flow at 19.67.

Red Hat, Inc. ability to deal with debt shows that the current ratio is 1.3, and the quick ratio is 1.3. This is with long term debt/equity at 0.54, and total debt/equity at 0.54.

In terms of margins, Red Hat, Inc. has a gross margin of 84.90%, an operating margin of 13.70% and a profit margin of 9.90%.Payout ratio for Red Hat, Inc. is 0.00%. Return on assets come to 5.30% with return on investment coming to 10.30%.

Insider ownership for Red Hat, Inc., is at 0.60% and institutional ownership comes to 96.50%. Outstanding shares are at 182.74. While shares float is 179.86. The float short is currently 2.65%, and short ratio is 3.41.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Mark Hines

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