Language Selection

English French German Italian Portuguese Spanish

Red Hat's Valuation Finally Matters

Filed under
Linux

While I've always had my doubts about Red Hat's (RHT) long-term growth potential in cloud and virtualization services, management systematically found ways to convince the Street that the company was turning the corner and averting threats from rivals including Oracle (ORCL) and VMware (VMW).

So, ahead of the company's fiscal second-quarter results, investors -- still casting their lot towards long-term revenue growth -- didn't mind paying 67 times earnings for the stock, which at the time was five times more than both Microsoft (MSFT) and Oracle.

However, following Red Hat's announcement, which included worse-than-expected guidance, the valuation issue finally came home to roost. As the stock dropped to an intraday low of 12%, I still wasn't convinced that investors got the message.

This has been a recurring theme for Red Hat. Truth be told.




More in Tux Machines

Jessie Release Date: 2015-04-25

We now have a target release date of Saturday the 25th of April. We have checked with core teams, and this seems to be acceptable for everyone. This means we are able to begin the final preparations for a release of Debian 8 - "Jessie". The intention is only to lift the date if something really critical pops up that is not possible to handle as an errata, or if we end up technically unable to release that weekend. Please keep in mind that we intend to have a quiet period from Saturday the 18th of April. Bug fixes must be *in Jessie* before then. Read more

Radeon Linux Benchmarks: Catalyst 15.3 Beta vs. Linux 4.0 + Mesa 10.6-devel

Before ending out March, here's some new OpenGL Linux benchmarks comparing the closed-source Catalyst 15.3 Beta driver against the Linux 4.0 development kernel with Mesa 10.6 Git for the freshest open-source graphics driver code. Read more

5 questions to determine if open source is a good fit for a software project

A benefit of open source in general, and commercial open source in particular, is that you have the support of others as well as the ability to do the maintenance yourself. I hope these questions will help you determine whether open source is a good fit for your next software project. Let me know if there are other questions you would add to this list. Read more