Splunk Buys Caspida, Wall Street Reacts Positively

on Thursday announced it acquired Caspida, a cyber-security and threat detection company for $190 million, $127 million of which will be in cash and $63 million in restricted common stock. Here are how some of Wall Street's top analysts reacted to the acquisition

Jack Andrews of DA Davidson commented in a note that Splunk's acquisition will "broaden" its security portfolio and enable the "out-of-the-box" analytics to detect, respond and mitigate security threats. Andrews also noted that the company reiterated its fiscal 2016 revenue guidance of $610 to $614 million and non-GAAP operating margins of two to three percent which implies Caspida's revenue contribution will likely be "modest." Shares remain Buy rated with an unchanged $83 price target.

Keith Weiss of Morgan Stanley commented in a brief note that Caspida's technology "matches well" to the ongoing shift of deterministic toward probabilistic security approaches and bodes well for Splunk. "With its strong background in data/analytics and the shift in spending we see towards more analytically focused solutions, Splunk remains one of our top plays on the security theme in software," Weiss wrote. Shares remain Overweight rated with an unchanged $84 price target.

Greg McDowell also commented in a brief note that he likes the acquisition as it advances Splunk's opportunity in the security space which has been a "strong suit" for the company. McDowell also noted that Splunk is the "best leveraged" company to the big data trend, and the company also "attacks" a large and under-penetrated market. Shares remain Market Outperform rated with an unchanged $81 price target.