RHT Is "Well Positioned To Sustain 15%-20% Billings Growth," Oppenheimer Reports

Red Hat, Inc. RHT reported strong 4Q11 results, highlighted by ~30% billings growth and a 22% YoY increase in CFFO, Oppenheimer reports. “While the stock has been under pressure due to concerns surrounding the impact of slowing server shipment growth on FY12 billings/CFFO, we believe the company is well positioned to sustain 15-20% billings growth for sometime to come,” Oppenheimer writes. “Driving the growth should be a healthy mix of benefits from the RHEL6 release (should drive ASPs and adoption rates higher), ongoing JBoss strength and building adoption of its virtualization product. At ~$44 AH, RHT trades at ~22.5x our CY12E unleveled FCF/share (ex-$6/share in cash on its books), near the low end of the subscription software group range of 20-30x, and remains attractive, in our view.” Red Hat closed Wednesday at $39.97.