Intrinsic value of Red Hat - RHT

Previous Close

$98.94

  Intrinsic Value

$92.19

stock screener

  Rating & Target

hold

-7%

  Value-price divergence*

+50%

Previous close

$98.94

 
Intrinsic value

$92.19

 
Up/down potential

-7%

 
Rating

hold

 
Value-price divergence*

+50%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of RHT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 17.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.54
  15.60
  14.54
  13.59
  12.73
  11.95
  11.26
  10.63
  10.07
  9.56
  9.11
  8.70
  8.33
  7.99
  7.69
  7.42
  7.18
  6.96
  6.77
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.85
  5.76
  5.68
  5.62
  5.55
  5.50
Revenue, $m
  2,412
  2,788
  3,194
  3,628
  4,089
  4,578
  5,094
  5,635
  6,203
  6,796
  7,415
  8,059
  8,731
  9,428
  10,154
  10,908
  11,691
  12,505
  13,352
  14,232
  15,147
  16,100
  17,092
  18,125
  19,201
  20,323
  21,494
  22,716
  23,992
  25,325
  26,717
Variable operating expenses, $m
 
  2,379
  2,710
  3,064
  3,440
  3,839
  4,260
  4,702
  5,164
  5,648
  6,153
  6,575
  7,123
  7,692
  8,284
  8,899
  9,538
  10,202
  10,893
  11,611
  12,358
  13,135
  13,944
  14,787
  15,665
  16,581
  17,536
  18,533
  19,574
  20,661
  21,797
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,080
  2,379
  2,710
  3,064
  3,440
  3,839
  4,260
  4,702
  5,164
  5,648
  6,153
  6,575
  7,123
  7,692
  8,284
  8,899
  9,538
  10,202
  10,893
  11,611
  12,358
  13,135
  13,944
  14,787
  15,665
  16,581
  17,536
  18,533
  19,574
  20,661
  21,797
Operating income, $m
  332
  409
  484
  564
  649
  739
  834
  934
  1,038
  1,147
  1,261
  1,484
  1,608
  1,736
  1,870
  2,009
  2,153
  2,303
  2,459
  2,621
  2,790
  2,965
  3,148
  3,338
  3,536
  3,743
  3,958
  4,183
  4,418
  4,664
  4,920
EBITDA, $m
  417
  537
  615
  698
  787
  881
  981
  1,085
  1,194
  1,308
  1,428
  1,552
  1,681
  1,815
  1,955
  2,100
  2,251
  2,408
  2,571
  2,740
  2,916
  3,100
  3,291
  3,489
  3,697
  3,913
  4,138
  4,373
  4,619
  4,876
  5,144
Interest expense (income), $m
  2
  26
  38
  56
  76
  97
  119
  142
  167
  193
  220
  248
  277
  307
  339
  372
  406
  442
  479
  517
  557
  599
  642
  687
  734
  783
  834
  887
  942
  1,000
  1,061
Earnings before tax, $m
  320
  383
  446
  508
  573
  642
  715
  791
  871
  955
  1,042
  1,237
  1,331
  1,429
  1,531
  1,637
  1,747
  1,861
  1,980
  2,104
  2,232
  2,366
  2,506
  2,651
  2,802
  2,960
  3,125
  3,297
  3,476
  3,664
  3,860
Tax expense, $m
  66
  103
  121
  137
  155
  173
  193
  214
  235
  258
  281
  334
  359
  386
  413
  442
  472
  503
  535
  568
  603
  639
  677
  716
  757
  799
  844
  890
  939
  989
  1,042
Net income, $m
  254
  280
  326
  371
  418
  469
  522
  578
  636
  697
  761
  903
  972
  1,043
  1,118
  1,195
  1,275
  1,359
  1,446
  1,536
  1,630
  1,727
  1,829
  1,935
  2,046
  2,161
  2,281
  2,407
  2,538
  2,675
  2,818

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,461
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,535
  4,018
  4,602
  5,227
  5,892
  6,597
  7,339
  8,120
  8,938
  9,792
  10,684
  11,613
  12,580
  13,586
  14,631
  15,717
  16,846
  18,019
  19,239
  20,507
  21,826
  23,199
  24,628
  26,116
  27,667
  29,284
  30,972
  32,732
  34,571
  36,491
  38,498
Adjusted assets (=assets-cash), $m
  3,074
  4,018
  4,602
  5,227
  5,892
  6,597
  7,339
  8,120
  8,938
  9,792
  10,684
  11,613
  12,580
  13,586
  14,631
  15,717
  16,846
  18,019
  19,239
  20,507
  21,826
  23,199
  24,628
  26,116
  27,667
  29,284
  30,972
  32,732
  34,571
  36,491
  38,498
Revenue / Adjusted assets
  0.785
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
Average production assets, $m
  320
  371
  425
  482
  544
  609
  677
  749
  825
  904
  986
  1,072
  1,161
  1,254
  1,350
  1,451
  1,555
  1,663
  1,776
  1,893
  2,015
  2,141
  2,273
  2,411
  2,554
  2,703
  2,859
  3,021
  3,191
  3,368
  3,553
Working capital, $m
  425
  -279
  -319
  -363
  -409
  -458
  -509
  -564
  -620
  -680
  -741
  -806
  -873
  -943
  -1,015
  -1,091
  -1,169
  -1,251
  -1,335
  -1,423
  -1,515
  -1,610
  -1,709
  -1,812
  -1,920
  -2,032
  -2,149
  -2,272
  -2,399
  -2,532
  -2,672
Total debt, $m
  748
  1,076
  1,602
  2,164
  2,763
  3,397
  4,066
  4,768
  5,504
  6,273
  7,076
  7,912
  8,782
  9,687
  10,628
  11,606
  12,622
  13,678
  14,775
  15,916
  17,103
  18,339
  19,625
  20,964
  22,360
  23,816
  25,334
  26,919
  28,574
  30,302
  32,108
Total liabilities, $m
  3,288
  3,616
  4,142
  4,704
  5,303
  5,937
  6,606
  7,308
  8,044
  8,813
  9,616
  10,452
  11,322
  12,227
  13,168
  14,146
  15,162
  16,218
  17,315
  18,456
  19,643
  20,879
  22,165
  23,504
  24,900
  26,356
  27,874
  29,459
  31,114
  32,842
  34,648
Total equity, $m
  1,247
  402
  460
  523
  589
  660
  734
  812
  894
  979
  1,068
  1,161
  1,258
  1,359
  1,463
  1,572
  1,685
  1,802
  1,924
  2,051
  2,183
  2,320
  2,463
  2,612
  2,767
  2,928
  3,097
  3,273
  3,457
  3,649
  3,850
Total liabilities and equity, $m
  4,535
  4,018
  4,602
  5,227
  5,892
  6,597
  7,340
  8,120
  8,938
  9,792
  10,684
  11,613
  12,580
  13,586
  14,631
  15,718
  16,847
  18,020
  19,239
  20,507
  21,826
  23,199
  24,628
  26,116
  27,667
  29,284
  30,971
  32,732
  34,571
  36,491
  38,498
Debt-to-equity ratio
  0.600
  2.680
  3.480
  4.140
  4.690
  5.150
  5.540
  5.870
  6.160
  6.410
  6.620
  6.810
  6.980
  7.130
  7.260
  7.380
  7.490
  7.590
  7.680
  7.760
  7.840
  7.910
  7.970
  8.030
  8.080
  8.130
  8.180
  8.220
  8.270
  8.300
  8.340
Adjusted equity ratio
  -0.070
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  254
  280
  326
  371
  418
  469
  522
  578
  636
  697
  761
  903
  972
  1,043
  1,118
  1,195
  1,275
  1,359
  1,446
  1,536
  1,630
  1,727
  1,829
  1,935
  2,046
  2,161
  2,281
  2,407
  2,538
  2,675
  2,818
Depreciation, amort., depletion, $m
  85
  127
  131
  134
  138
  142
  147
  151
  156
  161
  166
  67
  73
  79
  85
  91
  98
  105
  112
  119
  127
  135
  143
  152
  161
  170
  180
  190
  201
  212
  223
Funds from operations, $m
  989
  407
  457
  505
  557
  611
  669
  729
  792
  858
  927
  970
  1,045
  1,122
  1,202
  1,286
  1,373
  1,463
  1,557
  1,655
  1,756
  1,862
  1,972
  2,087
  2,206
  2,331
  2,461
  2,597
  2,738
  2,886
  3,041
Change in working capital, $m
  205
  -38
  -41
  -43
  -46
  -49
  -52
  -54
  -57
  -59
  -62
  -64
  -67
  -70
  -73
  -75
  -78
  -81
  -85
  -88
  -92
  -95
  -99
  -103
  -108
  -112
  -117
  -122
  -128
  -133
  -139
Cash from operations, $m
  784
  445
  497
  549
  603
  660
  720
  783
  849
  917
  989
  1,035
  1,112
  1,192
  1,275
  1,361
  1,451
  1,545
  1,642
  1,743
  1,848
  1,957
  2,071
  2,190
  2,314
  2,443
  2,578
  2,719
  2,866
  3,020
  3,180
Maintenance CAPEX, $m
  0
  -20
  -23
  -27
  -30
  -34
  -38
  -43
  -47
  -52
  -57
  -62
  -67
  -73
  -79
  -85
  -91
  -98
  -105
  -112
  -119
  -127
  -135
  -143
  -152
  -161
  -170
  -180
  -190
  -201
  -212
New CAPEX, $m
  -81
  -51
  -54
  -58
  -61
  -65
  -69
  -72
  -75
  -79
  -82
  -86
  -89
  -93
  -96
  -100
  -104
  -108
  -113
  -117
  -122
  -127
  -132
  -137
  -143
  -149
  -156
  -163
  -170
  -177
  -185
Cash from investing activities, $m
  -110
  -71
  -77
  -85
  -91
  -99
  -107
  -115
  -122
  -131
  -139
  -148
  -156
  -166
  -175
  -185
  -195
  -206
  -218
  -229
  -241
  -254
  -267
  -280
  -295
  -310
  -326
  -343
  -360
  -378
  -397
Free cash flow, $m
  674
  374
  420
  464
  511
  561
  613
  668
  726
  786
  849
  887
  955
  1,026
  1,100
  1,176
  1,256
  1,339
  1,425
  1,514
  1,607
  1,704
  1,805
  1,910
  2,019
  2,133
  2,252
  2,376
  2,506
  2,642
  2,783
Issuance/(repayment) of debt, $m
  -2
  329
  526
  563
  599
  634
  668
  702
  736
  769
  803
  836
  870
  905
  941
  978
  1,016
  1,056
  1,098
  1,141
  1,187
  1,235
  1,286
  1,340
  1,396
  1,456
  1,518
  1,585
  1,655
  1,728
  1,806
Issuance/(repurchase) of shares, $m
  -436
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -504
  329
  526
  563
  599
  634
  668
  702
  736
  769
  803
  836
  870
  905
  941
  978
  1,016
  1,056
  1,098
  1,141
  1,187
  1,235
  1,286
  1,340
  1,396
  1,456
  1,518
  1,585
  1,655
  1,728
  1,806
Total cash flow (excl. dividends), $m
  163
  703
  946
  1,027
  1,110
  1,195
  1,282
  1,371
  1,462
  1,556
  1,652
  1,723
  1,825
  1,931
  2,040
  2,154
  2,272
  2,395
  2,522
  2,655
  2,794
  2,939
  3,091
  3,249
  3,415
  3,589
  3,771
  3,961
  4,161
  4,370
  4,589
Retained Cash Flow (-), $m
  87
  -214
  -58
  -63
  -67
  -70
  -74
  -78
  -82
  -85
  -89
  -93
  -97
  -101
  -105
  -109
  -113
  -117
  -122
  -127
  -132
  -137
  -143
  -149
  -155
  -162
  -169
  -176
  -184
  -192
  -201
Prev. year cash balance distribution, $m
 
  1,059
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,548
  887
  964
  1,043
  1,124
  1,208
  1,293
  1,380
  1,470
  1,563
  1,630
  1,729
  1,830
  1,936
  2,045
  2,159
  2,277
  2,400
  2,529
  2,662
  2,802
  2,948
  3,100
  3,260
  3,427
  3,602
  3,785
  3,977
  4,178
  4,389
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  1,484
  812
  839
  859
  872
  876
  873
  863
  845
  819
  774
  738
  696
  650
  600
  549
  495
  442
  389
  338
  290
  245
  203
  166
  133
  105
  81
  62
  46
  33
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

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 physical, virtual, container, and cloud environments; Red Hat Satellite, a system management offering that helps to deploy and manage Red Hat infrastructure across physical and virtual servers, and 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, as well as integrating applications, data, and devices along with business processes automation; 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 treat physical server storage as a scalable, shared, centrally-managed pool of virtual storage and to manage large, unstructured, or semi-structured data in physical, virtual, and cloud environments. It also provides consulting, support, and training services; and real-time operating system, distributed computing, directory services, and user authentication. 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.

FINANCIAL RATIOS  of  Red Hat (RHT)

Valuation Ratios
P/E Ratio 68.9
Price to Sales 7.3
Price to Book 14
Price to Tangible Book
Price to Cash Flow 22.3
Price to Free Cash Flow 24.9
Growth Rates
Sales Growth Rate 17.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 44.6%
Cap. Spend. - 3 Yr. Gr. Rate -3.7%
Financial Strength
Quick Ratio 1461
Current Ratio 0.1
LT Debt to Equity 59.9%
Total Debt to Equity 60%
Interest Coverage 161
Management Effectiveness
Return On Assets 5.9%
Ret/ On Assets - 3 Yr. Avg. 5.4%
Return On Total Capital 12.5%
Ret/ On T. Cap. - 3 Yr. Avg. 10.8%
Return On Equity 19.7%
Return On Equity - 3 Yr. Avg. 15.8%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 85.3%
Gross Margin - 3 Yr. Avg. 85%
EBITDA Margin 16.9%
EBITDA Margin - 3 Yr. Avg. 17.5%
Operating Margin 13.8%
Oper. Margin - 3 Yr. Avg. 13.9%
Pre-Tax Margin 13.3%
Pre-Tax Margin - 3 Yr. Avg. 13.7%
Net Profit Margin 10.5%
Net Profit Margin - 3 Yr. Avg. 10.1%
Effective Tax Rate 20.6%
Eff/ Tax Rate - 3 Yr. Avg. 26%
Payout Ratio 0%

RHT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RHT stock intrinsic value calculation we used $2412 million for the last fiscal year's total revenue generated by Red Hat. The default revenue input number comes from 2017 income statement of Red Hat. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our RHT stock valuation model: a) initial revenue growth rate of 15.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for RHT is calculated based on our internal credit rating of Red Hat, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Red Hat.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of RHT stock the variable cost ratio is equal to 85.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for RHT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Red Hat.

Corporate tax rate of 27% is the nominal tax rate for Red Hat. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the RHT stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for RHT are equal to 13.3%.

Life of production assets of 15.9 years is the average useful life of capital assets used in Red Hat operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for RHT is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1247 million for Red Hat - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 176.237 million for Red Hat is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Red Hat at the current share price and the inputted number of shares is $17.4 billion.

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Stock chart of RHT Financial statements of RHT Annual reports of RHT
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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