There's room for more than one successful model in the software world, and not every company has to be IBM (NYSE:IBM) or Oracle (Nasdaq:ORCL). To that end, cloud-based models like Salesforce.com (NYSE:CRM) and service/support-oriented models like Red Hat (NYSE:RHT) can work in terms of generating attractive revenue and free cash flow
growth rates. What's key, though, is understanding what's different
about these models and adjusting expectations accordingly, and that may
still be a significant source of risk to Red Hat investors.
Fiscal Q4 Numbers Came In Weaker Than Expected
Like Oracle and TIBCO (Nasdaq:TIBX)
before it, Red Hat delivered a relatively disappointing quarterly
result, though the magnitude of the disappoint was different. Even so,
investors may do well to take a more cautious view of underlying growth
here.
Read the full article here:
http://www.investopedia.com/stock-analysis/032813/red-hats-valuation-looks-more-reasonable-expectations-could-be-problematic-rht-orcl-vmw-ibm-msft.aspx
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