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 Raspberry Pi, Linux Devices, and LEDE 17.01 Roy Schestowitz 17/01/2017 - 8:30pm
Story today's howtos Roy Schestowitz 17/01/2017 - 8:16pm
Story FSF announces a major overhaul of free software High Priority Projects List Roy Schestowitz 17/01/2017 - 8:08pm
Story KDE Leftovers Roy Schestowitz 17/01/2017 - 8:05pm
Story Leftovers: OSS Roy Schestowitz 17/01/2017 - 6:39pm
Story Leftovers: Ubuntu and Debian Roy Schestowitz 17/01/2017 - 6:37pm
Story GNU Gimp Development Roy Schestowitz 17/01/2017 - 6:36pm
Story Development News Roy Schestowitz 17/01/2017 - 6:36pm
Story Red Hat and Fedora Roy Schestowitz 17/01/2017 - 6:29pm
Story Security Leftovers Roy Schestowitz 17/01/2017 - 6:28pm