Market Overview

Why Splunk Should Consider Buying A Hardware Vendor

Share:
Related SPLK
Benzinga's Top Upgrades, Downgrades For November 6, 2018
IBM To Buy Red Hat In $34B Deal, IT Stocks Surge

If Splunk Inc (NASDAQ: SPLK) were to acquire a hardware vendor, the initial reaction from the Street may be negative, but in time, the stock would likely “rebound nicely,” Summit Redstone’s Srini Nandury said in a report. He maintained a Buy rating on the company, with a price target of $72.

“We continue to believe Splunk is the best infrastructure play in our coverage universe,” analyst Nandury wrote.

Acquiring A HW Vendor

Although owning hardware may be considered as “unfashionable,” while cloud is considered as the future, there is rationale behind Splunk acquiring a hardware vendor, Nandury commented.

Recent conversations with certain enterprise customers revealed that the company is getting merely $1 for every $4-$5 spent on the hardware and services to enable the application.

Many customers indicated that the need to deploy the solution within their own environment and would not even consider deploying the solution in the public cloud. “Having the solution deployed as an appliance has some benefits which would be helpful in large enterprise settings,” the analyst mentioned.

Commenting on the implementation of Splunk in their IT environments, several enterprise customers noted that they ran Splunk on a server, since hypervisors lowered the efficiency of the solution and added complexity. “In addition, hypervisors add latency to the system preventing rapid ingestion of the data to perform the analytics on the data stream. Hence a solution in the appliance form would make sense,” Nandury stated.

Splunk should consider shipping an appliance, since it would allow the company to gain additional share of the wallet, thereby accelerating growth in the near term, the analyst added.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for SPLK

DateFirmActionFromTo
Nov 2018BernsteinDowngradesOutperformMarket Perform
Oct 2018KeyBancMaintainsOverweightOverweight
Sep 2018BarclaysMaintainsOverweightOverweight

View More Analyst Ratings for SPLK
View the Latest Analyst Ratings

Posted-In: Srini Nandury Summit RedstoneAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas

 

Related Articles (SPLK)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
LXFTKeyBancDowngrades0.0
CPAImperial CapitalDowngrades68.0
PRMWImperial CapitalInitiates Coverage On18.0
TGTKeyBancInitiates Coverage On110.0
QCOMMorgan StanleyUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Mid-Morning Market Update: Markets Open Higher; Tech Data To Buy Technology Solutions From Avnet

7 Biggest Price Target Changes For Monday