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UPDATE: JMP Securities Reiterates On Splunk Ahead Of Q1 Earnings Report

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In a report published Tuesday, JMP Securities analyst Greg McDowell reiterated a Market Outperform rating on Splunk (NASDAQ: SPLK), but lowered the price target from $110.00 to $66.00.

In the report, JMP Securities noted, “We maintain our Market Outperform rating on Splunk but decrease our price target from $110 to $66 ahead of the company's Q1 earnings on May 29. We expect another strong quarter from Splunk and raise our Q1 revenue estimate from $82 million, up 43% yoy, to $83 million, up 45% yoy.

"In this note we provide an update to the customer spending survey we conducted in February, discuss some takeaways from our reseller checks and Cisco Live (which we attended yesterday), and discuss our recent due diligence with two private company competitors to Splunk. We maintain our FY15 non-GAAP EPS estimate of $0.02 versus consensus of breakeven, maintain our FY16 (CY15) non-GAAP EPS estimate of $0.27 versus consensus of $0.14, and maintain our FY17 (CY16) non-GAAP EPS estimate of $0.52 versus consensus of $0.36.

"Our new $66 price target is based on an EV/2016 revenue multiple of 8.6x (versus our prior 15x multiple), a 20% premium to the peer group median, which we believe is deserved based upon Splunk's trailing 12-month revenue growth of 52% and its leadership position. Our target multiple decreases as multiples of other stocks in Splunk's high-growth peer group have declined significantly.”

Splunk closed on Monday at $44.00.

Latest Ratings for SPLK

Jan 2018BarclaysUpgradesEqual-WeightOverweight
Nov 2017CitigroupMaintainsNeutral
Nov 2017UBSMaintainsBuy

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Posted-In: Greg McDowell JMP SecuritiesAnalyst Color Price Target Analyst Ratings


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