Wedbush’s Steve Koenig maintained an Outperform rating on Splunk, while lowering the price target from $163 to $158.
"The industry has witnessed significantly higher job postings this year, while checks indicate solid demand for Splunk’s solutions, which Koenig said enjoy the reputation of being able to provide visibility to large amounts of data from diverse sources.
Although Splunk’s pricing isn't customer friendly, but competitive risks seem to be longer-term in nature. The company had reset free cash flow guidance in the first quarter, which has “largely de-risked” the billings and bookings estimates for the second quarter and the back half of the year, the analyst said.
He expects the company to deliver a revenue beat of $12 million for the second quarter and believes there is upside to Wedbush’s EPS estimate of 10 cents.
While Splunk may maintain its fiscal 2020 guidance for operating margin and operating cash flow, there is room for the company to increase its full-year revenue guidance by $50 million, Koenig said.
AVERAGE ANALYSTS PRICE TARGET $150
AVERAGE ANALYSTS RECOMMENDATION overweight
P/E RATIO
SHORT INTEREST 5%
COMPANY PROFILE
Splunk, Inc. engages in the development and marketing of software solutions. Its products include Splunk cloud, Splunk light, and Splunk enterprise. It also offers solutions for information technology operations, security, internet-of-things, application analytics, business analytics, and industries. The company was founded by Erik M. Swan, Michael J. Baum and Robin K. Das in October 2003 and is headquartered in San Francisco, CA.
"The industry has witnessed significantly higher job postings this year, while checks indicate solid demand for Splunk’s solutions, which Koenig said enjoy the reputation of being able to provide visibility to large amounts of data from diverse sources.
Although Splunk’s pricing isn't customer friendly, but competitive risks seem to be longer-term in nature. The company had reset free cash flow guidance in the first quarter, which has “largely de-risked” the billings and bookings estimates for the second quarter and the back half of the year, the analyst said.
He expects the company to deliver a revenue beat of $12 million for the second quarter and believes there is upside to Wedbush’s EPS estimate of 10 cents.
While Splunk may maintain its fiscal 2020 guidance for operating margin and operating cash flow, there is room for the company to increase its full-year revenue guidance by $50 million, Koenig said.
AVERAGE ANALYSTS PRICE TARGET $150
AVERAGE ANALYSTS RECOMMENDATION overweight
P/E RATIO
SHORT INTEREST 5%
COMPANY PROFILE
Splunk, Inc. engages in the development and marketing of software solutions. Its products include Splunk cloud, Splunk light, and Splunk enterprise. It also offers solutions for information technology operations, security, internet-of-things, application analytics, business analytics, and industries. The company was founded by Erik M. Swan, Michael J. Baum and Robin K. Das in October 2003 and is headquartered in San Francisco, CA.