Red Hat, Inc. (NYSE:RHT) Fundamental Star Rating Report



Date Published:

FUNDAMENTAL STAR RATING

This is a fundamental star rating report for Red Hat, Inc. (NYSE:RHT) . The Capital Market Laboratories Star Rating is an objective, quantifiable measure of a company's operating and financial condition. Our research sits side-by-side with other institutions like Goldman Sachs, Morgan Stanley and the rest on professional terminals as a member of Thomson First Call. But we are the anti-institution and aim to break the information monopoly held by the top 0.1%. Just a few of the measures this star rating report focuses on are:

1. Revenue and trends.
2. Operating Margins.
3. After tax earnings.
4. Levered Free Cash Flow or Cash from Operations.

RHT REVENUE STAR RATING
Red Hat, Inc. reported revenue over the trailing twelve months of $2.23 billion, compared to $1.90 billion a year ago, or a 17.3% change. Two-years ago the company generated $1.67 billion in revenue, a 25.4% change from the most current year. Here is the data in tabular format:

Current Year Last Year Two Years Ago
$2.23 billion $1.90 billion $1.67 billion


Why These Numbers Matter to the Star Rating
RHT's fundamental rating benefited these results:
1. The one-year change was positive but no extra points were given for a large percentage increase .
2. The two-year change was positive.
Finally, the five or more consecutive quarters of an upward trend in revenue benefited the fundamental star rating.

RHT REVENUE PER EMPLOYEE AND REVENUE PER DOLLAR OF EXPENSE
The company generates $233,000 in revenue per employee which is below the sector average of $346,000.

Red Hat, Inc. generates $1.16 in revenue for every $1 in expense, which is above the sector average of $1.06. A year ago Operating Revenues/Operating Expense was 1.18. In the last year we can see operating margins are decreasing but are greater than 1.0 for the most recent period.

RHT fundamental rating was affected from the operating margin numbers in two ways:
1. The current value is above 1.0 so the firm generates an operating profit.
2. The one-year change was negative which lowers the rating a little bit.

Current Year Last Year Two Years Ago
$1.16 $1.18 $1.17


RHT EARNINGS STAR RATING REPORT
Earnings over the trailing twelve months for Red Hat, Inc. (NYSE:RHT) are rising. For the most recent trailing-twelve-months the company reported net income of $220 million. That's an increase in the most recent year from $195 million or a 12.67% change.

Current Year Last Year Two Years Ago
$220 million $195 million $182 million



RHT CASH FLOW STAR RATING REPORT
Red Hat, Inc. (NYSE:RHT) Levered Free Cash Flow (TTM US$ Millions) is a critical determinant of stock price since market cap is the present value of all future free cash flows. For RHT the metric is rising, it was $470 million last year. For the most recent trailing-twelve-months the company reported Levered Free Cash Flow (TTM US$ Millions) of $653 million. That's a rise in the most recent year from $470 million which is a 38.99% increase.

This measure of cash is up $311 million from 342 million two-years ago.

Current Year Last Year Two Years Ago
$653 million $470 million $342 million