Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Linux software company Red Hat
So what: Red Hat's adjusted EPS managed to squeak past estimates, but a particularly solid top-line beat -- $297 million versus the consensus of $291 million -- is forcing analysts to raise their growth expectations yet again. In fact, the news boosted the stock to its highest level since March 2000.
Now what: Looking ahead, management now sees 2013 revenue of about $1.35 billion -- slightly higher than Wall Street's view of $1.3 billion -- as the strong demand for Linux isn't expected to slow anytime soon. "The open source technologies which we provide are being selected by more customers every day as they rearchitect the infrastructure of their data centers for greater efficiency, agility and cloud enablement," said CEO Jim Whitehurst. Given Red Hat's red-hot stock and lofty 75-plus P/E, however, much of that growth might already be baked into the price.
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