![]() ![]() ![]() The firm reduced its Splunk estimates to reflect the potential recession impact related to COVID-19. In early April, Deutsche Bank trimmed its Splunk target to $140 from $170, while maintaining its ‘Buy’ rating. Splunk stock rockets with Silver Lake investment, buyback program seen as ‘ballast’ for beaten-down shares Published: Jat 3:53 p.m. ![]() Published Fri, Jun 9 20236:55 AM EDT Updated Fri, Jun 9 202312:16 PM EDT. Monness Crespi Hardt in early March downgraded Splunk to ‘Neutral,’ saying investors should be cautious as the company undergoes a more aggressive cloud transition amid a macroeconomic backdrop that’s growing more ominous. UBS calls this beauty stock a top idea exiting earnings season. But the firm maintains its ‘Buy’ rating because it expects significant outperformance for investors with a timeframe of two to three years. The company has an average price target of 134.2 with a high of 180.00 and a low of 110.00. Jefferies later reduced its target (now at $150), acknowledging the near-term risk to term-based license sales. In the last 3 months, 15 analysts have offered 12-month price targets for Splunk. In initially maintaining its Splunk target of $180, Jefferies pointed out that the decision to pivot to a cloud-first and subscriber-first model has proven to be a “massive tailwind” over the longer-term for other software vendors-including Adobe (ADBE), Autodesk (ADSK) and Intuit (INTU). Wedbush was among the most bullish at the time, boosting its target to $200 from $195, citing the surprisingly positive long-term guidance. Over the next three years, Splunk is calling for ARR growth to average 40%.įollowing the release of the FQ4 results, several Wall Street firm raised their Splunk price targets, with many going to at least the $180 level, pointing to the encouraging ARR and cash flow forecasts. For FY’21, the company is guiding to total ARR of $2.44 billion, representing growth of 45%. In FQ4, total ARR of $1.68 billion was up 54%, acceleration from growth of 53% in the previous quarter. The ARR metric represents the best way to gauge the company’s real growth momentum during this transition to the cloud because it removes the timing of deal closures from the mix. Starting next year, revenue growth is expected to rebound to the high 20% range. The chain sheet shows the price, volume and open interest for each option strike price and. That’s the reason why FY’21 top-line guidance of $2.6 billion fell short of the consensus of $2.88 billion. Call and put options are quoted in a table called a chain sheet. The ongoing transition presents a headwind to top-line growth, as cloud deals are fully ratable, meaning there’s less revenue recognized upfront. This means that using the most recent 20 day stock volatility and applying a one standard deviation move around the stocks closing price, stastically there is a 67 probability that SPLK stock will trade within this expected range on the day. Management calls for the cloud mix in FY’21 to be in the 40% range. SPLK support price is 97.17 and resistance is 101.99 (based on 1 day standard deviation move). ![]()
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