Red Hat Inc
RHT
Delayed Nyse - 10/20 10:04:16 pm
121.8USD
+0.16%

Close to a key resistance level

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Anas Lozach
 

Strategy published on : 08/08/2017 | 14:19

long trade
Target price hit

Entry price : 98.47$
Target : 106.3$
Stop-loss : 95.2$
Potential : 7.95%

Red Hat Inc shares are trading close to a major resistance level. Given the share's technical chart pattern, investors could anticipate that this resistance zone will be broken which could lead to new upside potential.
Summary

● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.

● In a short-term perspective, the company has interesting fundamentals.


Strengths

● Its core activity has a significant growth potential and sales are expected to surge, according to Thomson Reuters' forecast. Indeed, those may increase by 49% by 2020.

● The company returns high margins, thereby supporting business profitability.

● Thanks to a sound financial situation, the firm has significant leeway for investment.

● The group usually releases upbeat results with huge surprise rates.

● Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.

● Analysts remain confident with respect to the group's activity and, more often than not, have revised upwards their earnings per share estimates.

● Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.

● The stock is in a well-established, long-term rising trend above the technical support level at 82.96 USD


Weaknesses

● Stock prices approach a strong long-term resistance in weekly data at USD 99.42.

● The stock is currently in contact with a medium-term resistance that must be gotten rid of so as to resume the upward trend.

● The company's "enterprise value to sales" ratio is among the highest in the world.

● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 55.51 times its estimated earnings per share for the ongoing year.

Zonebourse.com 2017
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