Bank of America Sees License Strength Hidden Behind Ratable Transition for Splunk

In a report published Friday, Bank of America analyst Kash Rangan reiterated a Buy rating and $82.00 price target on

. In the report, Bank of America noted, “Splunk quarter results beat estimates ($101mn vs. ours/cons ests. of $93mn/$94mn and EPS of $0.01 vs. our/cons ests. at ($0.02) / ($0.03)). See pg 3 for variance. The company also guided 3FQ15 to $105-107mn revenue and 1% operating margin, and updated FY15 to $423-428mn revenue and 1% operating margin. Renewal rate remained at 94%, while the company added over 500 new customers (due to price decreases) and ended the quarter with 266 quota carrying reps with plans to reach 300-310 by the end of the year (vs. our expectation of 290).” Splunk closed on Thursday at $45.29.