Open-source software vendor Red Hat Inc. (NYSE: RHT) reported better-than-expected earnings and revenues after markets closed Tuesday evening, but the stock traded down more than 3% Wednesday morning. The company’s outlook, while not in the “wow” category, was also above expectations.

The downturn in the share price has been attributed to the company’s billings for the quarter. A company’s billings are the total of its revenues and its deferred revenues. Red Hat reported quarterly revenues of $544 million and deferred revenues of $220 million.

Red Hat does not provide quarterly calculations or forecasts of its total billings, but that doesn’t stop analysts from calculating their own numbers. A Credit Suisse estimate had billings totaling $768 million, compared with the reported total of $764 million. An average estimate of 12 analysts came in at $771 million, according to a report at Barron’s.

Now $7 million is less than 1% of billings, but in the fourth-quarter deferred revenues were lower than a year ago by some $4 million, and for the year deferred revenues were down by about $22 million compared with the year-ago period.

And that’s what knocked down the shares on Wednesday. While price target cuts outnumber increases, Credit Suisse takes a more positive view:

Red Hat’s Q4 results and FY2017 guidance reinforce our thesis that the continued momentum of RHEL [Red Hat Enterprise Linux], coupled with growing adoption of open source in enterprises, has enabled Red Hat to increasingly upsell its emerging products (e.g. OpenShift, CloudForms, Storage, and OpenStack, etc.). We believe that the next phase of cloud growth will be driven by enterprise adoption of hybrid cloud. Given its expanding portfolio of products, Red Hat is well positioned to benefit from the growing adoption of OpenStack and the cloud computing trend. We reiterate our Outperform rating and target price of $95.

Other ratings actions include:

• Baird raised its price target from $80 to $85 with an Outperform rating,
• BMO cut its price target to $88 and has an Outperform rating on the stock.
• Goldman Sachs cut its price target from $80 to $73 with a Sell rating.
• Raymond James lowered its price target from $95 to $85 with a rating of Outperform

Red Hat’s shares traded down about 4% just in the noon hour Wednesday, at $72.67 in a 52-week range of $59.59 to $84.44. The consensus price target on the stock is $88.23, but that may not include recent changes.

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