Note: The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.
RALEIGH, N.C. – Red Hat (NYSE: RHT) is beating Microsoft and other rivals in battles for “cloud computing” projects and is also mulling more acquisitions.
So says Trip Chowdhry, an anlayst at Global Equities Research. The upbeat report from Chowdhry on Friday and a lifting of Red Hat’s share target price to $57 from $53 by Lazard Capital on Monday sent Red Hat shares up more than 5 percent in early trading Monday to as high as $52.89 then inched as high as $52.95 before slipping a bit just before noon.
At the close, Red Hat finished up 3.2 percent at $51.80. Shares added 30 cents in after-hours trading.
The stock’s 52-week high is $53.42, a high-water mark reached on Nov. 16. Its next earnings report is due Dec. 19 after the markets close.
Based on his data, Chowdhry says Red Hat is winning five out of eight new private cloud projects. Cloud computing enables enterprise customers to share data and scale computing and server needs on demand across disparate networks.
“Red Hat Linux OS seems to be the foundation operating system for many enterprises private cloud projects,” he wrote.
Red Hat Enterprise Linux 6.0 also is luring users away from rival SUSE Linux, he noted.
Chowdhry has an “overweight” rating on Red Hat stock and a target price of $50. He expects Red Hat revenues to top $1.12 billion for fiscal 2012 with earnings of $1.05 a share.
“We are maintaining overweight rating as our research suggests that Red Hat may enjoy both revenue acceleration and margin expansion probably 8 to 12 months from now. Long-tem investors should continue to overweight Red Hat,” Chowdhry wrote.
Red Hat also could make more deals following its recent acquisition of Gluster, he added.
“We are anticipating Red Hat to probably make another 1 or 2 possible acquisitions in the Unstructured Storage infrastructure space, maybe over the next 1 or 2 quarters. This may cause near-term margin pressure; but possible revenue acceleration and margin expansion 8-12 months from now.”
Red Hat shares closed Friday at $50.22.
For more details about the Red Hat report, read International Business Times’ report here and Benzinga’s wrap-up here.
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