UPDATE: Stifel Reiterates Buy Rating, Raises PT on Splunk Following Solid 3Q15 Results

In a report published Friday, Stifel analyst Brad Reback reiterated a Buy rating on Splunk (NASDAQ: SPLK), and raised the price target from $65.00 to $75.00.In the report, Stifel noted, “Splunk reported healthy results for 3Q15, posting EPS/CFFO/total revenue of $0.02/$24.2M/$116.0M, well ahead of both management's guidance/consensus estimates. The company's strong performance this quarter was driven by new customer acquisitions, as SPLK signed over 500 new customers, and management's ability to continue to successfully up-/cross-sell into their installed base, closing 290 deals above $100K in 3Q15. Additionally, we note that SPLK once again experienced strong demand from within the public sector, and continues to see an ongoing adoption of their cloud offering, closing a seven figure transaction (the largest 3Q deal) during the quarter. Currently trading at ~10x CY16E EV/Revenue and ~39X EV/CF, shares are by no means cheap; however, we believe a premium is warranted given SPLK's strong billings growth (~50%), ongoing sales force/international operations investments, strong cash-flow generation, and growing proportion of recurring revenue (term license & subscription). Given these factors, we believe Splunk can continue to drive healthy double-digit revenue growth and upside to expectations in coming quarters. We remain buyers and raise our target price to $75 per share.”Splunk closed on Thursday at $64.94.