Expect Range-Bound Trading In Splunk Following Q3 Report
Splunk had a solid Q3 print, with revenue and EPS both topping consensus estimates, revenue growth of 40 percent and billings growth of 37 percent. But, short-term deterred revenue came in slightly below consensus mainly due to tough comps.
“While we like the ongoing healthy growth, we believe investors will continue to struggle given the many moving parts around revenue and billings; hence we expect the shares to continue to be range bound and maintain our Equal Weight rating,” analyst Raimo Lenschow wrote in a note.
Management commented that large cloud orders closed in the quarter impacted variability in cloud results as average order size for seven figure orders were down approximately $500,000.
Run Rate And A Look Forward
Further, Lenschow said the increased cloud run rate is impacting margins despite improvements in the underlying cloud profitability.
Lenschow has a price target of $56 on Splunk shares, which currently rose 3.98 percent to $59.66. About 5.21 million shares changed hands on Wednesday versus its three-month average of 1.60 million shares.
At last check, Splunk shares were up 2.91 percent at $59.05.
Latest Ratings for SPLK
|Mar 2017||Bernstein||Initiates Coverage On||Outperform|
|Jan 2017||Argus Research||Initiates Coverage On||Hold|
|Jan 2017||Wells Fargo||Initiates Coverage On||Outperform|
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.