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Red Hat

NYSE:RHT
Snowflake Description

Excellent balance sheet with reasonable growth potential.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
RHT
NYSE
$32B
Market Cap
  1. Home
  2. US
  3. Software
Company description

Red Hat, Inc. provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide. The last earnings update was 75 days ago. More info.


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RHT Share Price and Events
7 Day Returns
0.3%
NYSE:RHT
2.4%
US Software
1.2%
US Market
1 Year Returns
17.8%
NYSE:RHT
25.6%
US Software
3%
US Market
RHT Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Red Hat (RHT) 0.3% 0.6% 4.1% 17.8% 151% 225.2%
US Software 2.4% 5.5% 19.8% 25.6% 110.4% 139.4%
US Market 1.2% 2.1% 14.6% 3% 39% 43.5%
1 Year Return vs Industry and Market
  • RHT underperformed the Software industry which returned 25.6% over the past year.
  • RHT outperformed the Market in United States of America which returned 3% over the past year.
Price Volatility
RHT
Industry
5yr Volatility vs Market
Related Companies

Value

 Is Red Hat undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Red Hat to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Red Hat.

NYSE:RHT Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 23 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 9.3%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:RHT
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Software Unlevered Beta Simply Wall St/ S&P Global 1.14
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.141 (1 + (1- 21%) (1.6%))
1.104
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.1
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (1.104 * 5.96%)
9.31%

Discounted Cash Flow Calculation for NYSE:RHT using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Red Hat is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:RHT DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 9.31%)
2019 966.64 Analyst x14 884.31
2020 1,114.22 Analyst x14 932.51
2021 1,247.86 Analyst x6 955.41
2022 1,279.50 Analyst x2 896.20
2023 1,462.06 Analyst x2 936.86
2024 1,624.71 Analyst x2 952.41
2025 1,757.62 Est @ 8.18% 942.57
2026 1,872.66 Est @ 6.55% 918.74
2027 1,973.80 Est @ 5.4% 885.88
2028 2,064.59 Est @ 4.6% 847.71
Present value of next 10 years cash flows $9,152.60
NYSE:RHT DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= $2,064.59 × (1 + 2.73%) ÷ (9.31% – 2.73%)
$32,234.94
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $32,234.94 ÷ (1 + 9.31%)10
$13,235.53
NYSE:RHT Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $9,152.60 + $13,235.53
$22,388.13
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $22,388.13 / 176.76
$126.66
NYSE:RHT Discount to Share Price
Calculation Result
Value per share (USD) From above. $126.66
Current discount Discount to share price of $182.05
= -1 x ($182.05 - $126.66) / $126.66
-43.7%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Red Hat is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Red Hat's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Red Hat's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:RHT PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-11-30) in USD $1.58
NYSE:RHT Share Price ** NYSE (2019-03-20) in USD $182.05
United States of America Software Industry PE Ratio Median Figure of 84 Publicly-Listed Software Companies 53.03x
United States of America Market PE Ratio Median Figure of 3,058 Publicly-Listed Companies 17.69x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Red Hat.

NYSE:RHT PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:RHT Share Price ÷ EPS (both in USD)

= 182.05 ÷ 1.58

115.27x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Red Hat is overvalued based on earnings compared to the US Software industry average.
  • Red Hat is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Red Hat's expected growth come at a high price?
Raw Data
NYSE:RHT PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 115.27x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 23 Analysts
23.2%per year
United States of America Software Industry PEG Ratio Median Figure of 66 Publicly-Listed Software Companies 3.6x
United States of America Market PEG Ratio Median Figure of 2,103 Publicly-Listed Companies 1.48x

*Line of best fit is calculated by linear regression .

NYSE:RHT PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 115.27x ÷ 23.2%

4.96x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Red Hat is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Red Hat's assets?
Raw Data
NYSE:RHT PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-11-30) in USD $8.05
NYSE:RHT Share Price * NYSE (2019-03-20) in USD $182.05
United States of America Software Industry PB Ratio Median Figure of 220 Publicly-Listed Software Companies 5.84x
United States of America Market PB Ratio Median Figure of 5,156 Publicly-Listed Companies 1.89x
NYSE:RHT PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:RHT Share Price ÷ Book Value per Share (both in USD)

= 182.05 ÷ 8.05

22.6x

* Primary Listing of Red Hat.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Red Hat is overvalued based on assets compared to the US Software industry average.
X
Value checks
We assess Red Hat's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Software industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Software industry average (and greater than 0)? (1 check)
  5. Red Hat has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Red Hat expected to perform in the next 1 to 3 years based on estimates from 23 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
23.2%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Red Hat expected to grow at an attractive rate?
  • Red Hat's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Red Hat's earnings growth is expected to exceed the United States of America market average.
  • Red Hat's revenue growth is expected to exceed the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:RHT Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:RHT Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 23 Analysts 23.2%
NYSE:RHT Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 23 Analysts 12.9%
United States of America Software Industry Earnings Growth Rate Market Cap Weighted Average 16.1%
United States of America Software Industry Revenue Growth Rate Market Cap Weighted Average 10.9%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14.3%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.1%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:RHT Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:RHT Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2024-02-29 6,624 2,154 1,380 1
2023-02-28 5,946 1,909 1,149 1
2022-02-28 5,250 1,632 913 1
2021-02-28 4,460 1,388 647 9
2020-02-29 3,875 1,199 497 23
2019-02-28 3,371 1,041 429 23
NYSE:RHT Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2018-11-30 3,255 978 279
2018-08-31 3,157 1,001 286
2018-05-31 3,057 1,011 297
2018-02-28 2,920 923 259
2017-11-30 2,777 879 340
2017-08-31 2,644 855 306
2017-05-31 2,521 809 268
2017-02-28 2,412 784 254
2016-11-30 2,326 715 241
2016-08-31 2,235 727 220
2016-05-31 2,139 753 212
2016-02-29 2,052 736 199

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Red Hat's earnings are expected to grow significantly at over 20% yearly.
  • Red Hat's revenue is expected to grow by 12.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:RHT Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below

All data from Red Hat Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:RHT Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2024-02-29 7.42 7.42 7.42 1.00
2023-02-28 6.15 6.15 6.15 1.00
2022-02-28 4.86 4.86 4.86 1.00
2021-02-28 3.72 3.72 3.72 1.00
2020-02-29 2.63 2.79 2.17 10.00
2019-02-28 2.29 2.47 2.13 11.00
NYSE:RHT Past Financials Data
Date (Data in USD Millions) EPS *
2018-11-30 1.58
2018-08-31 1.62
2018-05-31 1.67
2018-02-28 1.46
2017-11-30 1.92
2017-08-31 1.72
2017-05-31 1.50
2017-02-28 1.41
2016-11-30 1.33
2016-08-31 1.21
2016-05-31 1.17
2016-02-29 1.09

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Unable to establish if Red Hat will efficiently use shareholders’ funds in the future without estimates of Return on Equity.
X
Future performance checks
We assess Red Hat's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Red Hat has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Red Hat performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Red Hat's growth in the last year to its industry (Software).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Red Hat's year on year earnings growth rate has been positive over the past 5 years.
  • Red Hat's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Red Hat's 1-year earnings growth is negative, it can't be compared to the US Software industry average.
Earnings and Revenue History
Red Hat's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Red Hat Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:RHT Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-11-30 3,255.40 279.29 1,611.31 650.86
2018-08-31 3,156.59 286.45 1,561.78 632.17
2018-05-31 3,057.20 296.68 1,498.87 607.67
2018-02-28 2,920.46 258.80 1,435.89 578.33
2017-11-30 2,776.97 339.81 1,379.84 546.47
2017-08-31 2,644.25 306.15 1,329.49 523.36
2017-05-31 2,520.70 267.83 1,298.43 502.82
2017-02-28 2,411.80 253.70 1,242.71 480.67
2016-11-30 2,326.47 240.94 1,202.13 467.25
2016-08-31 2,234.78 219.84 1,149.32 449.68
2016-05-31 2,139.13 212.46 1,089.56 430.91
2016-02-29 2,052.23 199.37 1,037.33 413.32
2015-11-30 1,972.67 194.03 989.30 396.86
2015-08-31 1,904.99 195.11 947.27 382.57
2015-05-31 1,846.74 190.54 917.27 375.35
2015-02-28 1,789.49 180.20 894.44 367.86
2014-11-30 1,725.95 177.57 862.28 358.46
2014-08-31 1,666.59 181.66 828.36 350.37
2014-05-31 1,595.11 175.65 791.92 333.40
2014-02-28 1,534.62 178.29 750.29 317.26
2013-11-30 1,482.10 176.20 720.78 305.87
2013-08-31 1,429.17 158.94 699.89 292.00
2013-05-31 1,377.35 153.13 678.48 277.07
2013-02-28 1,328.82 150.20 659.39 263.15
2012-11-30 1,277.94 143.20 637.17 247.05
2012-08-31 1,224.36 146.68 602.79 232.13
2012-05-31 1,183.09 151.64 571.61 220.25

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Red Hat has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Red Hat used its assets less efficiently than the US Software industry average last year based on Return on Assets.
  • Red Hat has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Red Hat's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Software industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Red Hat has a total score of 2/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Red Hat's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Red Hat's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Red Hat is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Red Hat's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Red Hat's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 5.8x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Red Hat Company Filings, last reported 3 months ago.

NYSE:RHT Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-11-30 1,423.63 516.13 1,926.14
2018-08-31 1,289.80 516.53 1,767.32
2018-05-31 1,431.94 749.05 2,097.22
2018-02-28 1,470.23 768.00 2,038.25
2017-11-30 1,433.14 762.37 1,715.89
2017-08-31 1,400.35 756.74 1,659.29
2017-05-31 1,305.54 751.17 1,638.48
2017-02-28 1,247.32 745.63 1,457.68
2016-11-30 1,271.80 740.15 1,294.87
2016-08-31 1,318.40 734.70 1,335.70
2016-05-31 1,349.34 729.31 1,396.42
2016-02-29 1,334.43 723.94 1,208.92
2015-11-30 1,344.79 729.29 1,136.03
2015-08-31 1,368.05 724.62 1,172.41
2015-05-31 1,349.42 720.00 1,183.74
2015-02-28 1,288.34 702.94 1,262.73
2014-11-30 1,233.81 710.84 1,115.41
2014-08-31 1,514.66 0.00 803.04
2014-05-31 1,524.80 0.00 803.19
2014-02-28 1,551.17 0.00 982.13
2013-11-30 1,471.20 0.00 966.54
2013-08-31 1,441.60 0.00 863.64
2013-05-31 1,393.31 0.00 853.64
2013-02-28 1,520.16 0.00 879.47
2012-11-30 1,481.22 0.00 886.34
2012-08-31 1,483.68 0.00 869.45
2012-05-31 1,415.72 0.00 818.96
  • Red Hat's level of debt (36.3%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (0% vs 36.3% today).
  • Debt is well covered by operating cash flow (189.4%, greater than 20% of total debt).
  • Red Hat earns more interest than it pays, coverage of interest payments is not a concern.
X
Financial health checks
We assess Red Hat's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Red Hat has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Red Hat's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Red Hat dividends. Estimated to be 0% next year.
If you bought $2,000 of Red Hat shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate Red Hat's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
  • Unable to evaluate Red Hat's dividend against the top 25% market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:RHT Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below
United States of America Software Industry Average Dividend Yield Market Cap Weighted Average of 24 Stocks 1.5%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2004 Stocks 2.5%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.6%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:RHT Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2024-02-29
2023-02-28
2022-02-28
2021-02-28 0.00 2.00
2020-02-29 0.00 3.00
2019-02-28 0.00 3.00

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to perform a dividend volatility check as Red Hat has not reported any payouts.
  • Unable to verify if Red Hat's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Red Hat's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Red Hat has not reported any payouts.
Future Payout to shareholders
  • No need to calculate the sustainability of Red Hat's dividends in 3 years as they are not expected to pay a notable one for United States of America.
X
Income/ dividend checks
We assess Red Hat's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Red Hat afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Red Hat has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Red Hat's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Jim Whitehurst
COMPENSATION $13,597,466
AGE 50
TENURE AS CEO 11.2 years
CEO Bio

Mr. James M. Whitehurst, also known as Jim, has been the Chief Executive Officer and President of Red Hat, Inc. since January 1, 2008. He serves as Advisor at Capri Venture. Mr. Whitehurst served as the Chief Operating Officer of Delta Air Lines, Inc. from July 20, 2005 to August 2007 and Senior Vice President and Chief Network and Planning Officer from June 1, 2004 to July 2005. From 2002 to 2004, Mr. Whitehurst served as Senior Vice President of Finance, Treasury & Business Development for Delta. He was responsible for Network Planning, Scheduling, Fleet Planning, Strategic & Corporate Planning and Business Development of Delta Air Lines, Inc. Mr. Whitehurst served as Managing Director of Boston Consulting Group and was its Partner. Prior to joining Delta Airlines in 2002, he served as a Vice President and Director of Boston Consulting Group from 1997 to 2001 and held various leadership roles in their Chicago, Hong Kong, Shanghai and Atlanta offices. He has been an Independent Director of United Continental Holdings, Inc. since March 7, 2016 and SecureWorks Corp. since April 21, 2016. He has been a Director of Red Hat, Inc. since January 1, 2008. He serves as a Director at United Airlines, Inc. He serves as a Member of International Advisory Board at Banco Santander,S.A. He served as a Director at DigitalGlobe, Inc. from August 2009 to May 26, 2016. In June 2015, he published a book with Harvard Business Review Press entitled The Open Organization: Igniting Passion and Performance. He holds a Bachelor's Degree in Computer Science and Economics from Rice University in Houston, Texas. He holds a General Course Degree from the London School of Economics and an MBA from Harvard Business School. He also attended Friedrich-Alexander University in Erlangen.

CEO Compensation
  • Jim's compensation has increased by more than 20% in the past year.
  • Jim's remuneration is about average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Red Hat management team in years:

8
Average Tenure
52
Average Age
  • The average tenure for the Red Hat management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Jim Whitehurst

TITLE
President
COMPENSATION
$14M
AGE
50
TENURE
11.2 yrs

Kim Hammonds

TITLE
Independent Director
COMPENSATION
$325K
AGE
51
TENURE
3.6 yrs

Eric Shander

TITLE
Executive VP & CFO
COMPENSATION
$3M
AGE
49
TENURE
1.9 yrs

Michael Cunningham

TITLE
Executive VP
COMPENSATION
$3M
AGE
57
TENURE
14.8 yrs

Arun Oberoi

TITLE
Executive Vice President of Global Sales & Services
COMPENSATION
$5M
AGE
63
TENURE
6.8 yrs

Paul Cormier

TITLE
Executive VP and President of Products & Technologies
COMPENSATION
$7M
AGE
61
TENURE
17.8 yrs

Michael Kelly

TITLE
Chief Information Officer
AGE
46
TENURE
2.6 yrs

Tom McCallum

TITLE
Vice President of Investor Relations
TENURE
12.2 yrs

Tim Yeaton

TITLE
Executive VP & CMO
AGE
59

Delisa Alexander

TITLE
Executive VP & Chief People Officer
COMPENSATION
$3M
AGE
52
TENURE
8 yrs
Board of Directors Tenure

Average tenure and age of the Red Hat board of directors in years:

6.2
Average Tenure
61.5
Average Age
  • The tenure for the Red Hat board of directors is about average.
Board of Directors

Naren Gupta

TITLE
Chairman of the Board
COMPENSATION
$349K
AGE
69
TENURE
1.6 yrs

Jim Whitehurst

TITLE
President
COMPENSATION
$14M
AGE
50
TENURE
11.2 yrs

Bill Kaiser

TITLE
Independent Director
COMPENSATION
$318K
AGE
62
TENURE
20.5 yrs

W. Albrecht

TITLE
Independent Director
COMPENSATION
$350K
AGE
71
TENURE
8 yrs

Sohaib Abbasi

TITLE
Independent Director
COMPENSATION
$335K
AGE
61
TENURE
8 yrs

Charlene Begley

TITLE
Independent Director
COMPENSATION
$330K
AGE
51
TENURE
4.3 yrs

Al Zollar

TITLE
Independent Director
AGE
63
TENURE
0.8 yrs

Kevin Murai

TITLE
Director
AGE
54
TENURE
0.5 yrs
Who owns this company?
Recent Insider Trading
  • Red Hat insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
11. Feb 19 Sell Michael Cunningham Individual 07. Feb 19 07. Feb 19 -25,000 $178.79 $-4,469,750
01. May 18 Sell James Whitehurst Individual 30. Apr 18 30. Apr 18 -20,529 $164.55 $-3,371,437
30. Apr 18 Sell Paul Cormier Individual 26. Apr 18 27. Apr 18 -43,611 $163.27 $-7,115,060
16. Apr 18 Sell Delisa Alexander Individual 13. Apr 18 13. Apr 18 -222 $156.19 $-34,674
11. Apr 18 Sell Charlene Begley Individual 10. Apr 18 10. Apr 18 -4,500 $156.15 $-702,675
10. Apr 18 Sell Arun Oberoi Individual 09. Apr 18 09. Apr 18 -15,000 $153.58 $-2,303,700
X
Management checks
We assess Red Hat's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Red Hat has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Can Red Hat, Inc. (NYSE:RHT) Maintain Its Strong Returns?

With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. … Our data shows Red Hat has a return on equity of 20% for the last year. … That means that for every $1 worth of shareholders' equity, it generated $0.20 in profit.

Simply Wall St -

Red Hat Inc (NYSE:RHT): A Look At Return On Capital

This is because the actual cash flow generated by the business dictates the potential for income (dividends) and capital appreciation (price increases), which are the two ways to achieve positive returns when buying a stock. … Therefore, looking at how efficiently Red Hat is able to use capital to create earnings will help us understand your potential return. … Investors use many different metrics but the analysis below focuses on return on capital employed (ROCE).

Simply Wall St -

Is Now An Opportune Moment To Examine Red Hat Inc (NYSE:RHT)?

saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $151.9 and falling to the lows of $116.87. … This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price? … A question to answer is whether Red Hat's current trading price of $120.52 reflective of the actual value of the?

Simply Wall St -

These Factors Make Red Hat Inc (NYSE:RHT) A Great Investment

As an investor, I look for investments which does not compromise one fundamental factor for another. … By this I mean, I look at stocks holistically, from their financial health to their future outlook.

Simply Wall St -

Is Red Hat Inc's (NYSE:RHT) ROE Of 20.72% Sustainable?

With an ROE of 20.72%, Red Hat Inc (NYSE:RHT) outpaced its own industry which delivered a less exciting 12.85% over the past year. … Sustainability can be gauged by a company’s financial leverage – the more debt it has, the higher ROE is pumped up in the short term, at the expense of long term interest payment burden.

Simply Wall St -

Red Hat Inc (NYSE:RHT): The Return Story

This is because the actual cash flow generated by the business dictates the potential for income (dividends) and capital appreciation (price increases), which are the two ways to achieve positive returns when buying a stock. … To understand Red Hat’s capital returns we will look at a useful metric called return on capital employed. … This will tell us if the company is growing your capital and placing you in good stead to sell your shares at a profit

Simply Wall St -

Red Hat Inc (NYSE:RHT): Exploring Free Cash Flows

I will take you through Red Hat’s cash flow health and the risk-return concept based on the stock’s cash flow yield, using the most recent financial data. … Red Hat generates cash through its day-to-day business, which needs to be reinvested into the company in order for it to continue operating. … I will be analysing Red Hat’s FCF by looking at its FCF yield and its operating cash flow growth.

Simply Wall St -

How Financially Strong Is Red Hat Inc (NYSE:RHT)?

the key to extending previous success is in the health of the company’s financials. … Let’s take a look at Red Hat’s leverage and assess its financial strength to get an idea of their ability to fund strategic acquisitions and grow through cyclical pressures … Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysis

Simply Wall St -

Have Investors Priced In Red Hat Inc's (NYSE:RHT) Growth?

received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $176.27 at one point, and dropping to the lows of $132.74. … A question to answer is whether Red Hat's current trading price of $132.74 reflective of the actual value of the? … Let’s take a look at Red Hat’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change

Simply Wall St -

Does Red Hat Inc's (NYSE:RHT) PE Ratio Signal A Selling Opportunity?

RHT is priced at an enormous multiple of 117x based on its prior year’s earnings,. … considerably outstripping the 37x average 3.16 multiple of the Software. … To resolve this problem, I’ll identify some important factors to consider when judging the relative valuation of

Simply Wall St -

Company Info

Description

Red Hat, Inc. provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide. It offers infrastructure-related solutions, such as Red Hat Enterprise Linux, an operating system platform that runs on hardware for use in hybrid cloud environments; Red Hat Satellite, a system management offering that helps to deploy, scale, and manage in hybrid cloud environments; and Red Hat Enterprise Virtualization, a software solution that allows customers to utilize and manage a common hardware infrastructure to run multiple operating systems and applications. The company offers application development-related and other technology solutions, such as Red Hat JBoss Middleware, a solution for developing, deploying, and managing applications; integrating applications, data, and devices; and automating business processes in hybrid cloud environments; The company’s application development-related and other technology solutions also includes Red Hat cloud offerings, a software solution that enables customers to build and manage various cloud computing environments; Red Hat Mobile, a software development platform that enables customers to develop, integrate, deploy, and manage mobile applications for enterprises; and Red Hat Storage, a software solution that enables customers to manage large, unstructured, or semi-structured data in hybrid cloud environments. It also provides consulting, support, and training services; and realtime operating system, distributed computing, directory services, and user authentication. Red Hat, Inc. has collaboration with Juniper Networks Expand to provide a unified solution for enterprises designed to manage and run applications and services. The company was formerly known as Red Hat Software, Inc. and changed its name to Red Hat, Inc. in June 1999. Red Hat, Inc. was founded in 1993 and is headquartered in Raleigh, North Carolina.

Details
Name: Red Hat, Inc.
RHT
Exchange: NYSE
Founded: 1993
$32,179,243,199
176,760,468
Website: http://www.redhat.com
Address: Red Hat, Inc.
100 East Davie Street,
Raleigh,
North Carolina, 27601,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE RHT Common Stock New York Stock Exchange US USD 11. Aug 1999
DB RHI Common Stock Deutsche Boerse AG DE EUR 11. Aug 1999
LSE 0KUI Common Stock London Stock Exchange GB USD 11. Aug 1999
BMV RHT * Common Stock Bolsa Mexicana de Valores MX MXN 11. Aug 1999
Number of employees
Current staff
Staff numbers
11,870
Red Hat employees.
Industry
Systems Software
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/03/20 23:44
End of day share price update: 2019/03/20 00:00
Last estimates confirmation: 2019/03/20
Last earnings filing: 2019/01/04
Last earnings reported: 2018/11/30
Last annual earnings reported: 2018/02/28


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.