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GuruFocus has detected 3 Warning Signs with Red Hat Inc $RHT.
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Red Hat Inc (NYSE:RHT)
PEG Ratio
PE(NRI) Ratio / EBITDA 5-Y Growth
4.94 (As of Today)

PEG is defined as the P/E (NRI) Ratio divided by the growth ratio. The growth rate we use is the 5-year average EBITDA growth rate. As of today, Red Hat Inc's P/E (NRI) Ratio is 63.73. Red Hat Inc's 5-year average EBITDA growth rate is 12.90%. Therefore, Red Hat Inc's PEG for today is 4.94.

RHT' s PEG Ratio Range Over the Past 10 Years
Min: 0.34   Max: 7.91
Current: 4.94

0.34
7.91

During the past 13 years, Red Hat Inc's highest PEG was 7.91. The lowest was 0.34. And the median was 4.36.

RHT's PEG Ratio is ranked lower than
75% of the 567 Companies
in the Global Software - Application industry.

( Industry Median: 1.98 vs. RHT: 4.94 )

Peter Lynch thinks a company with a P/E (NRI) ratio equal to its growth rate is fairly valued.


Definition

PEG is defined as the P/E (NRI) Ratio divided by the growth ratio. The ratio we use is the 5-year average EBITDA growth rate.

Red Hat Inc's PEG for today is calculated as

PEG=P/E (NRI) Ratio/EBITDA Growth Rate (5-year average)
=63.726618705/12.90
=4.94

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG. PEG is defined as the P/E ratio divided by the growth ratio. He thinks a company with a P/E ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a P/E of 20, instead of a company growing 10% a year with a P/E of 10.


Related Terms

P/E (NRI) Ratio, Peter Lynch Fair Value


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Red Hat Inc Annual Data

Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16Feb17
peg 0.000.833.136.504.774.343.394.044.214.60

Red Hat Inc Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
peg 3.494.044.474.255.164.214.954.724.744.60
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