Analysts have grown increasingly bullish on Red Hat Inc RHT following a first-quarter earnings beat, continuing from an exceptional fiscal 2017 Q4.
BTIG analyst Joel Fishbein reiterated a Buy rating while raising its price target from $95 to $120.
“[Fiscal Q1] may prove to be a landmark quarter for Red Hat,” said Fishbein in a note.
The results suggest that Red Hat is becoming increasingly relevant to companies trying to modernize their information technology.
The company’s metrics in Q1 were “stellar” all around. Billings beat the Street’s estimated 12 percent year-over-year growth at 21 percent. The company reported 44 $1+ million deals, seven $5+ million deals, four $10+ million deals, and one $20+ million deal.
“We think RHT can maintain double-digit revenue, operating income and EPS growth over the next few years,” said Fishbein.
This outlook was attributed in part to increasing contributions from non-core solutions and other application development deals.
The analyst also raised his revenue and EPS estimates by $65 million and $0.06, above consensus.
The stock was up 10 percent on Wednesday’s open.
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