Goldman Sachs Says Red Hat's Transition to Infrastructure Service Provider PromisingNov 10, 2000, 16:23 (3 Talkback[s])
(Other stories by Michael Hall)
By Michael Hall, LinuxToday
Investment banking and securities firm Goldman Sachs came away from Red Hat's Analyst Day, held yesterday, maintaining a "market outperform" rating on the company's stock and noting that the Red Hat Network - key to the company's transition from shrinkwrap Linux marketer to services company - shows some promise.
"In our view, the key takeaway is the company's transformation from a Linux software vendor to an Internet infrastructure service provider," read the summary the firm released this morning.
The report went on to say "though still in its very early stages, we believe Red Hat Network could become a valuable conduit between Red Hat and its end users."
Yesterday Red Hat also announced the hire of Kevin Thompson to the position of Chief Financial Officer for the company. Thompson has reiterated Red Hat's previous assertions that their revenues will grow by 100% over last year's, with the company showing profitability of $7.6 million in 2002.
Thompson also said the general slump in hardware vendor stocks triggered by troubled dot-coms, which VA Linux blamed for sales totalling $4 million less than expected in the latest quarter, won't effect Red Hat:
"They sell hardware and software, we sell software and services. We do not have nearly the dependence on the dot-coms and don't expect that we will," said Thompson
Red Hat stock is currently trading about 4% lower than recent averages, though analysts say the uncertainty of the US Presidential election is causing a general slump in the market.