UPDATE: JG Capital Downgrades Splunk to Neutral on Valuation
In a report published Monday, JG Capital analyst Jeff Gaggin downgraded the rating on Splunk (NASDAQ: SPLK) from Buy to Neutral, but reiterated the $43.00 price target.
In the report, Gaggin noted, “We are downgrading SPLK to Neutral on valuation, despite our expectations they beat our estimates for FQ1 (April) – report May 30th – and raise guidance for FY14E (Jan). Since Splunk primarily uses an on-premise model (upfront license fees), their deals can be lumpy though we think mgmt is taking this into account in their conservative guidance. Our field checks continued to show Splunk gaining traction with their big data analytics solutions, as IT orgs look to leverage their machine data to improve operational intelligence. Since Splunk delivers accelerating value as more data is indexed and correlated across an organization, customers have a propensity to consume more data in a particular use case.”
Splunk closed on Friday at $44.89.
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