After the close on Monday, Red Hat (RHT) announced Q2 earnings that met analyst estimates (assuming the removal of acquisition costs). The concerning part remains that earnings were flat year-over-year. Sure, the company is ramping up marketing and research expenses, but most stocks have a difficult time remaining at 40x multiples during those transitions.
The interesting part though is that the stock was only down 3% as of writing this article. After a decent rally this year, a normal stock would get hit harder off these weak numbers.
The company is a leading provider of open source software solutions, taking a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies.
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