Red Hat Positioned 'Better Than Ever' In IT World, Cantor Proclaims

Loading...
Loading...
In a report published Thursday, Cantor Fitzgerald analyst Brian J. White maintained a Buy rating on
Red Hat Inc
RHT
, with a price target of $90, saying that the company was positioned "better than ever" in the IT world. "In our view, Red Hat and the open source software technology world at large are key enablers of this "information revolution" that is impacting nearly all industries, which we believe will increasingly play into Red Hat's hand and open up new growth opportunities," analyst Brian J. White said. Five of Red Hat's top ten customers purchased OpenStack from the company in FY15. White believes this market represents "an attractive new growth driver for Red Hat." There was significant interest in containers at the Red Hat Summit, where the company indicated that its competitive advantage in this arena seems to be the fact that containers are "an operating system (OS) technology and the OS is embedded in the container." In the report Cantor Fitzgerald noted, "Although RHEL remains the dominant contributor of Red Hat's revenue, the Applications Development-related & Other Emerging Technology Offerings (ADOET) has been growing at a much faster rate (e.g., up 44% in constant currency in 1Q:FY16) and represents 60-65% of the company's estimated $67 billion TAM." The ADOET business includes middleware, storage, OpenStack and other cloud-related solutions. Red Hat indicated that ADOET's rapid growth was resulting in increased RHEL sales. Red Hat believes that ADOET's margin could be similar to that of RHEL in the long run.
Loading...
Loading...
Posted In: Analyst ColorReiterationAnalyst RatingsCantor Fitzgerald
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...