Piper Jaffray Raises Estimates; Reiterates Overweight Rating on Red Hat (RHT)

Piper Jaffray is out with a research report this morning, where their analysts reiterated their Overweight Rating on shares of Red Hat Inc.

; they have a $37.00 price target on the stock. Piper analysts cited the company’s most recent earnings report, which was issued yesterday, after the bell. They said, “Red Hat's Q1 revenue exceeded consensus and FY11 guidance was reaffirmed despite a negative FX impact of $15M, indicating the underlying business strengthened meaningfully. Billings growth of 18% was in line with consensus, but was artificially constrained by a larger initial consulting services mix. Red Hat clarified that bookings grew faster than revenue and backlog grew sequentially-both unusual signs of strength for a Q1. Results are consistent with our global partner checks that indicated positive business momentum and share gains.” They added, “Total revenue of $209M (+20% y/y) exceeded the consensus of $203M, while PF EPS of $0.18 matched consensus. RHT expects Q2 (Aug) total revenue of $210–212M (+14% to 15% y/y) and PF EPS of $0.18 versus the consensus of $207.5M (+13% y/y) and $0.18, respectively. Management reaffirms FY11 total revenue guidance of $835–850M (+12% to 14% y/y), versus the consensus of $843M (+13% y/y), and PF EPS of $0.71-0.74, versus the consensus of $0.74.”