Intrinsic value of Red Hat - RHT

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$88.58

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$88.58

 
Intrinsic value

$97.49

 
Up/down potential

+10%

 
Rating

hold

 
Value-price divergence* premium content

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*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 15.8

 

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
  23
  39
  57
  75
  95
  115
  137
  160
  184
  209
  235
  261
  289
  319
  349
  380
  413
  447
  482
  519
  557
  597
  638
  682
  727
  774
  823
  874
  927
Earnings before tax, $m
  320
  383
  461
  525
  592
  664
  739
  818
  901
  987
  1,078
  1,276
  1,373
  1,475
  1,580
  1,690
  1,804
  1,923
  2,046
  2,174
  2,307
  2,446
  2,590
  2,741
  2,898
  3,061
  3,232
  3,410
  3,596
  3,790
  3,993
Tax expense, $m
  66
  103
  124
  142
  160
  179
  200
  221
  243
  267
  291
  344
  371
  398
  427
  456
  487
  519
  552
  587
  623
  660
  699
  740
  782
  827
  873
  921
  971
  1,023
  1,078
Net income, $m
  254
  280
  337
  383
  432
  485
  540
  597
  658
  721
  787
  931
  1,003
  1,077
  1,154
  1,234
  1,317
  1,404
  1,494
  1,587
  1,684
  1,786
  1,891
  2,001
  2,115
  2,235
  2,359
  2,489
  2,625
  2,767
  2,915

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
  3,552
  4,068
  4,621
  5,209
  5,832
  6,489
  7,179
  7,902
  8,657
  9,445
  10,267
  11,122
  12,011
  12,935
  13,895
  14,893
  15,931
  17,009
  18,130
  19,296
  20,509
  21,773
  23,089
  24,460
  25,890
  27,381
  28,938
  30,563
  32,261
  34,035
Adjusted assets (=assets-cash), $m
  3,074
  3,552
  4,068
  4,621
  5,209
  5,832
  6,489
  7,179
  7,902
  8,657
  9,445
  10,267
  11,122
  12,011
  12,935
  13,895
  14,893
  15,931
  17,009
  18,130
  19,296
  20,509
  21,773
  23,089
  24,460
  25,890
  27,381
  28,938
  30,563
  32,261
  34,035
Revenue / Adjusted assets
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
  0.785
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
  -1,196
  -1,370
  -1,556
  -1,754
  -1,964
  -2,185
  -2,418
  -2,661
  -2,915
  -3,181
  -3,458
  -3,745
  -4,045
  -4,356
  -4,679
  -5,016
  -5,365
  -5,728
  -6,105
  -6,498
  -6,907
  -7,332
  -7,775
  -8,237
  -8,719
  -9,221
  -9,745
  -10,293
  -10,864
  -11,462
Total debt, $m
  748
  657
  1,122
  1,619
  2,148
  2,709
  3,300
  3,921
  4,571
  5,251
  5,961
  6,700
  7,470
  8,270
  9,101
  9,966
  10,864
  11,798
  12,768
  13,777
  14,826
  15,918
  17,055
  18,240
  19,474
  20,761
  22,103
  23,504
  24,967
  26,495
  28,091
Total liabilities, $m
  3,288
  3,197
  3,662
  4,159
  4,688
  5,249
  5,840
  6,461
  7,111
  7,791
  8,501
  9,240
  10,010
  10,810
  11,641
  12,506
  13,404
  14,338
  15,308
  16,317
  17,366
  18,458
  19,595
  20,780
  22,014
  23,301
  24,643
  26,044
  27,507
  29,035
  30,631
Total equity, $m
  1,247
  355
  407
  462
  521
  583
  649
  718
  790
  866
  945
  1,027
  1,112
  1,201
  1,293
  1,390
  1,489
  1,593
  1,701
  1,813
  1,930
  2,051
  2,177
  2,309
  2,446
  2,589
  2,738
  2,894
  3,056
  3,226
  3,403
Total liabilities and equity, $m
  4,535
  3,552
  4,069
  4,621
  5,209
  5,832
  6,489
  7,179
  7,901
  8,657
  9,446
  10,267
  11,122
  12,011
  12,934
  13,896
  14,893
  15,931
  17,009
  18,130
  19,296
  20,509
  21,772
  23,089
  24,460
  25,890
  27,381
  28,938
  30,563
  32,261
  34,034
Debt-to-equity ratio
  0.600
  1.850
  2.760
  3.500
  4.120
  4.640
  5.090
  5.460
  5.790
  6.070
  6.310
  6.530
  6.720
  6.890
  7.040
  7.170
  7.290
  7.410
  7.510
  7.600
  7.680
  7.760
  7.830
  7.900
  7.960
  8.020
  8.070
  8.120
  8.170
  8.210
  8.250
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
  337
  383
  432
  485
  540
  597
  658
  721
  787
  931
  1,003
  1,077
  1,154
  1,234
  1,317
  1,404
  1,494
  1,587
  1,684
  1,786
  1,891
  2,001
  2,115
  2,235
  2,359
  2,489
  2,625
  2,767
  2,915
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
  467
  517
  571
  627
  686
  749
  814
  882
  953
  999
  1,076
  1,156
  1,239
  1,325
  1,415
  1,508
  1,605
  1,706
  1,811
  1,920
  2,034
  2,152
  2,276
  2,405
  2,539
  2,679
  2,826
  2,978
  3,138
Change in working capital, $m
  205
  -161
  -174
  -186
  -198
  -210
  -221
  -232
  -243
  -254
  -265
  -277
  -288
  -299
  -311
  -323
  -336
  -349
  -363
  -378
  -393
  -409
  -425
  -443
  -462
  -482
  -502
  -524
  -547
  -572
  -597
Cash from operations, $m
  784
  576
  641
  704
  769
  837
  907
  981
  1,057
  1,136
  1,218
  1,275
  1,363
  1,455
  1,550
  1,649
  1,751
  1,858
  1,968
  2,084
  2,204
  2,329
  2,459
  2,596
  2,738
  2,886
  3,041
  3,203
  3,373
  3,550
  3,736
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
  505
  564
  619
  677
  737
  801
  866
  935
  1,005
  1,079
  1,127
  1,207
  1,289
  1,375
  1,463
  1,556
  1,651
  1,751
  1,855
  1,963
  2,076
  2,193
  2,315
  2,443
  2,576
  2,716
  2,861
  3,013
  3,172
  3,339
Issuance/(repayment) of debt, $m
  -2
  -90
  465
  497
  529
  560
  591
  621
  651
  680
  710
  739
  769
  800
  832
  864
  898
  933
  970
  1,009
  1,049
  1,092
  1,137
  1,184
  1,234
  1,287
  1,342
  1,401
  1,463
  1,528
  1,597
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
  -90
  465
  497
  529
  560
  591
  621
  651
  680
  710
  739
  769
  800
  832
  864
  898
  933
  970
  1,009
  1,049
  1,092
  1,137
  1,184
  1,234
  1,287
  1,342
  1,401
  1,463
  1,528
  1,597
Total cash flow (excl. dividends), $m
  163
  414
  1,029
  1,117
  1,206
  1,298
  1,392
  1,487
  1,585
  1,686
  1,789
  1,867
  1,976
  2,089
  2,206
  2,328
  2,454
  2,585
  2,721
  2,864
  3,012
  3,168
  3,330
  3,500
  3,677
  3,863
  4,058
  4,262
  4,476
  4,700
  4,935
Retained Cash Flow (-), $m
  87
  -568
  -52
  -55
  -59
  -62
  -66
  -69
  -72
  -76
  -79
  -82
  -85
  -89
  -92
  -96
  -100
  -104
  -108
  -112
  -117
  -121
  -126
  -132
  -137
  -143
  -149
  -156
  -163
  -170
  -177
Prev. year cash balance distribution, $m
 
  1,460
  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
 
  1,306
  977
  1,061
  1,148
  1,236
  1,326
  1,418
  1,513
  1,610
  1,710
  1,785
  1,891
  2,000
  2,114
  2,232
  2,354
  2,481
  2,614
  2,752
  2,896
  3,046
  3,204
  3,368
  3,540
  3,720
  3,909
  4,106
  4,313
  4,530
  4,758
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
 
  1,252
  895
  924
  945
  958
  962
  958
  946
  925
  896
  847
  807
  761
  710
  655
  598
  540
  481
  424
  368
  315
  266
  221
  180
  145
  114
  88
  67
  49
  36
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 61.7
Price to Sales 6.5
Price to Book 12.6
Price to Tangible Book
Price to Cash Flow 20
Price to Free Cash Flow 22.3
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 -42.9%. 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 178.551 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 $15.8 billion.


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COMPANY NEWS

▶ [$$] Red Hat Acquires Codenvy   [May-26-17 06:29PM  The Wall Street Journal]
▶ Red Hat to acquire cloud computing firm   [May-25-17 09:45AM  American City Business Journals]
▶ Ready for more Red Hat? RHEL 7.4 beta released   [May-24-17 01:41PM  ZDNet]
▶ 3 Stocks With Double-Digit Return Potential   [May-18-17 10:09AM  Motley Fool]
▶ Red Hat Summit 2018 Dates Announced   [08:00AM  Business Wire]
▶ ETFs with exposure to Red Hat, Inc. : May 1, 2017   [May-01-17 04:22PM  Capital Cube]
▶ Red Hat's cloud love affair   [01:27PM  ZDNet]
▶ Red Hat Unveils JBoss AMQ 7   [Apr-27-17 09:00AM  Business Wire]
▶ 3 Top Cloud-Computing Stocks to Buy in 2017   [Apr-21-17 11:00AM  Motley Fool]
▶ New Red Hat CFO Reflects On Tough Start   [Apr-20-17 03:36PM  The Wall Street Journal]
▶ Red Hat names new CFO   [Apr-18-17 05:30PM  American City Business Journals]
▶ Why IBM Partnered with Red Hat   [Apr-14-17 09:07AM  Market Realist]
▶ [$$] Positive Trend on ServiceNow, Neutral for Red Hat   [Apr-10-17 03:20PM  Barrons.com]
▶ 3 Stocks You Can Safely Own Until 2027   [Apr-08-17 02:08PM  Motley Fool]
▶ Why users are keeping Linux from gaining market share   [Apr-05-17 01:13PM  TechRepublic]
▶ Here Is What's Behind Red Hat's Strongest Quarter In Years   [Apr-03-17 07:42PM  TheStreet.com]
▶ Three Tech Stocks to Buy for the Second Quarter   [Mar-31-17 12:30PM  Investopedia]
▶ What's Next For Red Hat, Inc.?   [09:19AM  Motley Fool]
▶ Post-Earnings Valuation: Red Hat Edition   [06:00AM  Investopedia]
▶ Cramer: Red Hat's Numbers Are Worthy of a Hat Tip   [Mar-28-17 07:01PM  TheStreet.com]
▶ Red Hat Guides High, Driven by Public Cloud   [04:05PM  at Investopedia]
▶ Red Hat Stock Jumps on Strong Earnings, Outlook   [10:44AM  at Investopedia]
▶ Why Red Hat Is Surging After Earnings   [08:55AM  24/7 Wall St.]
▶ Bullish Red Hat Is Poised to Break Out   [08:24AM  at TheStreet]
▶ Red Hat crosses $3B bookings milestone   [Mar-27-17 06:30PM  at bizjournals.com]
▶ Red Hat shares rise on revenue beat, outlook   [04:31PM  at MarketWatch]
▶ What to Expect From Red Hat Earnings   [01:40PM  24/7 Wall St.]
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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