Red Hat (NYSE: RHT) is one of 125 publicly-traded companies in the “Software” industry, but how does it compare to its rivals? We will compare Red Hat to similar businesses based on the strength of its valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.

Earnings & Valuation

This table compares Red Hat and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Red Hat $2.41 billion $253.70 million 73.28
Red Hat Competitors $2.28 billion $423.93 million 423.39

Red Hat has higher revenue, but lower earnings than its rivals. Red Hat is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and target prices for Red Hat and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red Hat 1 8 22 0 2.68
Red Hat Competitors 275 2078 4400 86 2.63

Red Hat currently has a consensus target price of $112.48, suggesting a potential downside of 7.53%. As a group, “Software” companies have a potential upside of 3.12%. Given Red Hat’s rivals higher probable upside, analysts clearly believe Red Hat has less favorable growth aspects than its rivals.

Risk & Volatility

Red Hat has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Red Hat’s rivals have a beta of 0.90, indicating that their average stock price is 10% less volatile than the S&P 500.

Profitability

This table compares Red Hat and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Red Hat 11.49% 25.27% 7.43%
Red Hat Competitors -44.10% -25.51% -9.42%

Institutional & Insider Ownership

94.8% of Red Hat shares are owned by institutional investors. Comparatively, 57.8% of shares of all “Software” companies are owned by institutional investors. 0.7% of Red Hat shares are owned by insiders. Comparatively, 19.3% of shares of all “Software” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Red Hat beats its rivals on 8 of the 13 factors compared.

About Red Hat

Red Hat, Inc. (Red Hat) provides open source software solutions, using a community-powered approach to develop and offer operating system, virtualization, management, middleware, cloud, mobile and storage technologies. Red Hat operates through three geographical segments: the Americas, including the United States, Canada and Latin America; EMEA, including Europe, Middle East and Africa, and Asia Pacific. Its products and services include infrastructure-related offerings, application development-related and other technology offerings, and consulting, support and training services. Its infrastructure-related offerings include Red Hat Enterprise Linux, Red Hat Satellite and Red Hat Enterprise Virtualization. Its application development-related and other technology offerings include Red Hat JBoss Middleware, Red Hat cloud offerings, Red Hat Mobile and Red Hat Storage. Its consulting services include upgrade planning, platform migrations, solution integration and application development.

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