Market Overview

Wall Street Sees Even More Upside For Splunk


Splunk Inc (NASDAQ: SPLK) reported Q4 earnings on Thursday and beat analyst expectations.

The stock soared following the results and opened at over $74 Friday before giving back its gains. By mid-day it traded at $69.40, down 0.24 percent.

Analysts weighed in on the results Friday and were very positive on the stock as well as the company's outlook. Below are highlights along with current ratings and price targets.

FRB & Co. - Outperform, $90 price target

"Splunk appears to be experiencing an inflection point in growth as evidenced by accelerating license growth (up 43 percent year over year in F4Q versus 41 percent in F3Q), with tailwinds coming from execution acumen and the big data paradigm shift at enterprises worldwide. Robust demand in key growth areas such as cloud/security are also adding major jet fuel to Splunk's growth engine, in our view, and we believe the company's new pricing model (announced yesterday morning), which removes data usage restrictions for enterprise adoption agreements (EAAs), will add further tailwinds to the company's growth over the coming years as enterprises look to maximize Splunk's unique machine data technology platform, potentially driving more large deal sizes."

Wedbush - Outperform, $82 price target

"Perhaps the best news was SPLK's FY16 revenue guidance raise of $25M to $600M (+33 percent Y/Y), as we hadn't expected a significant raise this early in the year. Moreover, SPLK should beat and raise guidance handily as the year progresses, due to its billings momentum, sales additions (+39 percent Y/Y in FY15), and expanding product portfolio. Management expects a 30-40 percent recurring mix of bookings this year, roughly on par with the 38 percent observed in FY15 (at least for now). Even with a slight mix shift to recurring, we estimate SPLK can beat its FY16 revenue guidance by roughly $20M, and we think we will likely be able to revise this estimate upwards."

Morgan Stanley - Overweight, $84 price target

"More use cases, more products, more delivery models and more distribution enabled SPLK to sustain high-40's billings exiting FY15 and should drive upside to conservative FY16 targets. Q4 illustrated the leverage in model which should drive FCF growth ahead of consensus and SPLK towards our $84 PT."

Credit Suisse - Outperform, $85 price target

"Splunk remains one of our top ideas, as we believe that its disruptive technology, as well as the massive market opportunity and the early-stage adoption of Big Data technologies, position Splunk for sustained revenue growth. Furthermore, with the growing adoption of Hunk, the increasingly diverse use cases of Splunk (which Splunk is reinforcing by augmenting its domain expertise in specific segments), and the continued evolution of its application development platform, we believe that Splunk is uniquely positioned to emerge as a key, next-generation unified data platform."

Jefferies - Buy, $90 price target

"We believe that the limiting factor for SPLK at this time is scaling its distribution, as the product can be used for many distinct use cases, which requires a somewhat sophisticated sales person. Recent hires of technology experts to supplement a generalist sales force appear to be doing well, especially in early efforts in security use cases. We expect broader application of this approach."

Deutsche Bank - Buy, $80 price target

"What impressed us about Splunk's quarter was the breadth of actions that management was taking to drive longer-term growth, including changes to the pricing model (introducing a fixed-price or "unlimited EAA" SKU), replacing more key sales leaders, embracing the cloud, pivoting to Hadoop-based deployments, investing in security monitoring use cases (now 35-40 percent of the mix) and now moving into analytics, all while growing revs and billings at a 47 percent clip and generating 35 percent OCF margins in 4QF15."

JMP Securities - Market Outperform, $81 price target

"It was another record quarter, with 600 new enterprise customers (vs. our estimate of 500), bringing Splunk's total customer count above 9,000; as well as record deals above $100K, with 429, and above $1M, with 39, closed in the quarter. The company also saw strength from more recent offerings, including security and cloud, where it closed a number of six and seven-figure deals."

Latest Ratings for SPLK

Mar 2019Morgan StanleyMaintainsEqual-WeightEqual-Weight
Mar 2019MizuhoInitiates Coverage OnBuy
Mar 2019CitigroupMaintainsSellSell

View More Analyst Ratings for SPLK
View the Latest Analyst Ratings

Posted-In: Credit Suisse Deutsche Bank FBR JefferiesAnalyst Color Price Target Analyst Ratings Trading Ideas


Related Articles (SPLK)

View Comments and Join the Discussion!

UPDATE: Valero Energy Partners LP To Acquire Certain Valero Terminaling Businesses for $671M

Live Cattle Futures Move Down