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

Type Title Author Replies Last Postsort icon
Story Linux at 25: How Linux changed the world Roy Schestowitz 25/08/2016 - 4:07pm
Story Linux Kernel News and Microsoft Breaks PowerShell Roy Schestowitz 25/08/2016 - 3:28pm
Story Android Leftovers Roy Schestowitz 25/08/2016 - 3:25pm
Story Comparison of the Samsung Z1 vs Z2 vs Z3 Tizen smartphones Rianne Schestowitz 25/08/2016 - 3:07pm
Story 25 things to love about Linux Rianne Schestowitz 25/08/2016 - 1:54pm
Story GNU/FSF Roy Schestowitz 25/08/2016 - 12:45pm
Story Linux and Graphics Roy Schestowitz 25/08/2016 - 12:25pm
Story Security News Roy Schestowitz 25/08/2016 - 12:24pm
Story today's howtos Roy Schestowitz 25/08/2016 - 12:23pm
Story Openwashing Roy Schestowitz 25/08/2016 - 12:22pm