Analysts remain upbeat about Red Hat

Wall Street analysts liked what they heard at Red Hat’s annual Analyst Day, which was held in Boston on Wednesday.

The event “helped reaffirm our positive view on the stock as management’s presentation and our conversations at the expo floor indicated that the company is becoming more strategic for its end customers,” Mizuho Securities analyst Abhey Lamba wrote in a research note. Analyst Day was held in conjunction with Red Hat Summit, a four-day event for the Raleigh-based open source software company’s customers and partners, as well as for open source software devotees.

Lamba also noted that he anticipates that billings, a leading indicator of future revenue, are likely to continue to grow in the “high teens,” percentage-wise, “which should be a positive for the stock.”

Lamba rates Red Hat shares as a “buy,” which is not surprising. According to Bloomberg News, 22 of 30 analysts who cover the stock rate it a buy or its equivalent.

Steven Ashley of Robert W. Baird & Co. also was upbeat after Analyst Day.

“While customer enthusiasm for OpenStack remained high,, enthusiasm for OpenShift has surged even higher during the past year,” Ashley wrote, referring to Red Hat cloud-based products. The official name of the OpenStack product is Red Hat Enterprise Linux OpenStack Platform.

Lamba noted that although he anticipated “minimal revenue impact directly from OpenStack in the near term, we think the company’s presence in the space is making it more strategic for its customers and driving larger deals.”

Red Hat shares were trading at $79.15, up 63 cents, Thursday afternoon. Its shares have risen 14 percent this year and are trading near their 52-week high.

This story was originally published June 25, 2015 at 3:08 PM with the headline "Analysts remain upbeat about Red Hat."