Monday, May 7, 2007

What to Expect From Red Hat on Wednesday

I have been pushing Red Hat since it dropped below 21 last week in anticipation for their analyst day on the 9th. Buyers are steadily moving into RHT as they are optamistic RHT will comment on positive updates on their current quarter.

Here are a few things analysts are expecting them to imply:

Risk / Reward improving; Bear calls fading; Multiple upside drivers

  1. The RHEL 5 pricing structure should be clarified for the positive; for instance If the customer is not running RHEL virtualization then they must pay for the guest RHEL
  2. This could prove to be an ingenious way to raise prices
  3. Further clarity in PC & Red Hat Exchange strategies could offer EPS upside
  4. Believe the stock is undervalued at current levels
  5. Biggest product cycle in 5 years because of RHEL 5 which was launched in March
  6. JBoss & Desktop should be 07 drivers, desktop speculation is that Lenovo has given strength in China, aquisition of MetaMatrix and partnership with Vitria is positive for the stock
  7. ORCL/MSFT appears to be validating & expanding market
  8. Windows-to-Linux migration opportunities continuing to expand
  9. Reported 2 solid Qtrs; Pricing remains stable
Looking forward to what they have to say on Wednesday.

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