Red Hat Now Worth $81/Share After Earnings Call, JMP Says

In a report published Friday, JMP Securities analyst Greg Mcdowell maintained a Market Outperform rating on

, while raising the price target from $79 to $81. Red Hat reported its 1Q16 revenues and non-GAAP EPS at $481 million and $0.44, respectively, versus the consensus estimates for $473 million and $0.41. The company's total billings came in at $444 million, after excluding a onetime revenue benefit of $5 million, marginally short of the consensus estimate of $445 million. "Nonetheless, we felt the quarter was strong overall (short term billings were up 24% in constant currency) and the company guided well, in our view, raising full-year non-GAAP EPS guidance and maintaining full-year revenue and operating cash flow guidance, in spite of FX headwinds of 850 bps in Q1," analyst Greg Mcdowell mentioned. Red Hat reported that 30 of its top deals during the quarter were worth over $1 million and two deals were over $10 million. Seven of these deals were standalone application development and emerging technology offerings. In the report JMP Securities noted, "We like Red Hat as we believe it will continue to be a "share gainer" against Unix and Windows, and we feel that JBoss and OpenStack can become meaningful contributors to the business over the next few year." The non-GAAP EPS estimate for FY16 has been raised from $1.81 to $1.82.