Red Hat Considered The 'Best Positioned' Software Company By MKM

In a note to investors Thursday, MKM analyst Kevin Buttigieg admitted to several disappointing features of Red Hat Inc RHT’s recent earnings release.

• Billings growth was good, but some slowing was evident.
• Acquisitions put pressure on cash flows and affected guidance.
• Speaking of guidance, it was mixed, with revenue reaffirmed but EPS estimated lower by $0.03

Despite these bearish indicators, Buttigieg continues to see Red Hat as one of the best names in infrastructure software. However, he retains his Neutral rating based on the height of the current market valuation and the pressure acquisitions will place on margins and cash flow.